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Expert: Doubling Ohio's EITC a Good Move, But it's Still not Enough


Thursday, May 22, 2014   

COLUMBUS, Ohio – The state Senate Finance Committee is deciding on its changes to Gov. John Kasich's
mid-biennium review budget.

Among the approved measures is an increase of the state's Earned Income Tax Credit, or EITC, for low-wage Ohio families from 5 percent to 10 percent of the federal credit.

Hannah Halbert, policy liaison for the research group Policy Matters Ohio, says while it's a step in the right direction it's still too weak and needs to be refundable to reach the poorest workers in the state.

"That means that the credit would have to do more than just reduce income tax liability,” she explains. “It would have to be refundable so that families could actually see a tax refund at the end of the day, instead of just this reduced liability."

Halbert says the EITC is the nation's most effective antipoverty program, and has traditionally had bipartisan support because only families with earned income can claim the credit.

She is hopeful Ohio policymakers will continue the conversation about making the state credit refundable so it's more in line with the federal credit.

Halbert says the EITC works best when it includes all elements of the federal credit including being refundable.

She adds that in 2012, the federal credit brought about 6 million Americans out of poverty, half of whom are children.

"Kids in EITC households are born healthier,” she stresses. “They do better in school, they have better college attainment rates.

“There's just a world of benefit to maintaining this credit and making sure all of those policy components are intact."

Last tax season, 18 percent of Ohio families claimed the federal EITC and received an average refund of more than $2,000.

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