The state’s new Earned Income Tax Credit is a hit. As of Friday, more than 70,000 Connecticut residents have taken advantage of the program.
“Higher than anticipated EITC applications show just how hard hit these families were during the recession,” Gov. Dannel P. Malloy said in a press release. “The additional income the credit provides will help families pay for essentials such as clothing for children, medical care, reduction of household debt, or other living expenses and perhaps even begin to save for the future.”
On average the amount residents are getting back from the state is about $700, which is much higher than the projected $540. The Department of Revenue Services estimated that about $49.3 million in credits have been approved.
The state estimated that close to 190,000 families will qualify for the credit. These families don’t have any state income tax liability, but proponents of the program say they often pay a higher percentage of their income in sales and gasoline taxes than more affluent families. Proponents also argue the money given out by the state often goes directly back into the economy.
“We are thrilled so many working families are already filing for the state EITC,” Jim Horan, executive director of the Connecticut Association of Human Services, said. “EITC is already helping lots of working families make ends meet.”
Horan wants to make sure that anyone earning less than $50,000 can get their taxes prepared for free at 100 sites statewide. His organization has been warning low-income filers to steer clear of the big box accounting groups, who claim to file taxes for free, but end up taking a cut of the tax return.
“We are early in the first year of Connecticut’s EITC,” Malloy said, “but we believe it is already making a difference in residents’ lives. At the same time, it’s a real reinvestment in the state’s consumer economy.”
The maximum state credit is $1,725. Combined with the federal EITC, the maximum payment a Connecticut family can receive is $7,476.