Lawmakers consider increase to Indiana earned income tax credit

A state lawmaker says his bill to increase Indiana’s earned income tax credit would be a huge boost to addressing generational poverty.

The credit is meant for lower-income people and families. Income limits are based on the number of children you have.

To be eligible, families with two or more children can earn up to about $49,000. And right now, those families could get a credit on their state taxes of just over $600.

Under Rep. Chuck Goodrich’s (R-Noblesville) bill, HB1290, that would go up to more than $900.

“So, we know that the money that is returned from their taxes will actually go right back into the economy,” Goodrich said.

READ MORE: The Earned Income Tax Credit: How Does It Work?

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Kathryn Williams represents Lafayette Urban Ministry, which helps low-income Hoosiers. She said the credit makes a huge difference in people’s lives.

“One of the people could afford to buy a used car so she could continue working as a home health aide,” Williams said. “Somebody else was able to afford to move out of a home that had bad rental conditions, to move into a better place.”

According to the Urban Institute, Indiana is one of 31 states with an earned income tax credit (in addition to the federal EITC). Only five states have a credit lower than Indiana’s current level.

A House committee heard testimony on the bill Wednesday but did not vote on it.

Contact reporter Brandon at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.