Back 

2013 Earned Income Tax Credits EITC Introductions635252044

2013 Earned Income Tax Credits (EITC) Legislation

12/31/2013

Overview

During the 2013 legislative session, 37 bills relating to the earned income tax credit (EITC) were introduced in 21 states. Eighteen of them were enacted.

Thirty bills were introduced regarding creating, increasing, reducing or retaining state earned income tax credits (EITC) by 18 states: Colorado, Connecticut, Hawaii, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Montana, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Utah and Wisconsin.

  • Eight bills were introduced to create an EITC in six states—Hawaii, Massachusetts, Montana, Ohio, South Carolina and Utah.  One bill was enacted in Ohio.

           NOTE: Massachusetts already has a state EITC. Its bill was to create a new EITC for early childhood educators.

  • Fourteen bills were introduced to increase the EITC in nine states—Iowa, Maine, Massachusetts, Michigan, Minnesota, New Jersey, Oregon, Rhode Island and Wisconsin.  Six bills were enacted in Iowa, Minnesota, New Jersey and Oregon.

    NOTE: The bill to increase the EITC in New Jersey was enacted but then vetoed by the governor. The bill in Rhode Island keeps the state EITC at its existing percentage but  increases the partial refund percentage.
  • Three bills were introduced to retain the EITC –  Colorado, Kansas and Oregon. Two were enacted in Colorado and Oregon.
  • Five bills were introduced to reduce the EITC in three states—Connecticut, Kansas and North Carolina. Three were enacted in Connecticut and North Carolina.

    NOTE: The enacted bill to reduce the EITC for tax year 2013 in North Carolina also repeals the credit for taxable years beginning January 2014


Five bills were introduced in five states—Alabama, California, Iowa, Michigan and Virginia—to notify individuals of the availability of the EITC and to conduct free tax preparation for those eligible. Four of these bill were enacted in Alabama, Iowa, Michigan and Virginia.

Two bills related to administering the EITC were enacted in Virginia.

Read NCSL's report, Tax Credits for Working Families: Earned Income Tax Credits, to learn more about the federal and state EITCs.

2013 EITC Legislation

Below is the legislation relating the state EITC, including links to bills, their last status in 2013 and a bill summary.

Alabama

H.J.R. 29, Enacted, Delivered to Governor 3/7/2013.
Recognizes the SaveNow WinLater, a program administered by SaveFirst, which provides tax preparation services to qualifying EITC recipients and promotes savings.

California

SCR 12, Set first hearing. Hearing canceled at the request of author, 5/2/2013     

Encourages the state to inform citizens and employees about the federal EITC and VITA programs by dispersing information through public and private agencies like the Department of Workforce Investment Service Centers and  local school districts.

Colorado

S.B. 1,  Enacted, Signed by Governor, 6/5/2013  
Makes the state EITC of 10 percent of the federal credit, permanent and refundable. Implementation of the credits is contingent upon state revenues reaching the level specified by the Taxpayer Bill of Right Act. This bill also appropriates an additional $60,000 from general funds for programming services to implement this act.

Connecticut

H.B. 6704, Enacted, Signed by Governor, 6/19/2013        
Reduces the state EITC from 30 percent to 25 percent in tax year 2013. In tax year 2014 the percentage will increase to 27.5 percent. Any state or federal EITC refund is not to be counted as a resource when determining a person's eligibility for state and federal benefits and services.

Hawaii

S.B. 301 SD 2 HD1/H.B. 385, Both measures carried over to 2014 Regular Session,12/18/2013                                                                 
Creates a refundable state EITC, at a percentage not yet disclosed.

Iowa

S.F. 295, Enacted, Signed by Governor, 6/12/2013
Increases the state EITC from 7 to 14 percent for taxable year 2014 and 15 percent for 2015.

S.F.88   Subcommittee reassigned, Bolkcom, Seng, and Smith. S.J. 229. 2/7/2013, Fiscal note. SCS., 2/28/2013
Increases the state EITC from 7 percent to 20 percent of the federal EITC, the state EITC would be refundable as well. The new percent would apply retroactively to Jan. 1, 2013 and beyond.         

S.F. 422, Subcommittee, Windschitl, Oldson, and Sands. H.J. 938., 4/24/2013       
Increases the state EITC from 7 percent to 20 percent of the federal EITC, the state EITC would be refundable as well. The new percent would apply retroactively to Jan. 1, 2013 and beyond.

S.F.446, Enacted, Item vetoed (did not affect EITC appropriation), Signed by Governor., 6/20/2013        

Appropriates $195,678 for tax preparation and EITC outreach.

Kansas

H.B. 2060, Conference Committee is requested, 4/2/2013
Reduces the state EITC for tax year 2013 from 17 percent to 9 percent for 2013 and all years thereafter.

H.B. 2329, Referred to Committee on Taxation, 2/14/2013  
Would keep the existing state EITC at 18 percent starting in 2010 and for all tax years thereafter, instead of letting it decrease to 17 percent starting in tax year 2013.

S.B. 232, Committee Report recommending bill be passed, 3/20/2013       
Reduces the state EITC for tax year 2013 from 18 percent to 9 percent for 2013 and all years thereafter.

Maine

H.P. 305/L.D. 455, Carried over to any Special or Regular Session of the 126th Legislature pursuant to Joint Order H.P. 1145.,7/10/2013
Would increase the state earned income credit from 5 percent to 10 percent of the federal earned income credit and provides that the state earned income credit is fully refundable.

Massachusetts

S 1317,  Referred to the Committee on Revenue, 1/22/2013, Joint Hearing scheduled for 3/26/2013
Increases the state EITC from 15 percent to 20 percent. Also requires the Commissioner of Revenues to institute an outreach program to inform taxpayers about the EITC and the option to receive the refund throughout the year in each paycheck.

S 1324/H 2568, Referred to the Committee on Revenue 1/22/2013, Joint Hearing scheduled for 5/14/2013
Creates a refundable EITC specifically for early educators equal to 30 percent of the federal credit (the state EITC is currently 15 percent). 

Michigan

S.B. 128, Referred to Committee on Finance, 1/31/2013  
Increases the state EITC from 6 percent to 20 percent for tax years beginning after December 31, 2012.

H.R.15, Adopted, 1/24/2013
Declares a “Show Me The Money Day” on the last Saturday in January to coincide closely with the National EITC Awareness Day. Communities will kick off tax season by offering financial resources: free financial education classes, affordable financial products, and saving and asset building programs at local events.

Minnesota

H.F. 677/S.F. 552,   H.F. 677 Enacted—Signed by Governor, 5/23/2013, NOTE: H.F. 677 substituted for S.F. 552, S.F. 552 did not pass     
Increases the income level at which the credit begins to phase out for married joint filers, beginning in tax year 2013.  For tax years 2013 to 2017, the threshold is increased by $5,000, with the $5,000 amount indexed for inflation from 2009, so that the additional phaseout amount for tax year 2013 is estimated to be $5,340. For tax year 2018 and following years, increases the threshold by $3,000, with the $3,000 amount indexed for inflation from 2008.  This would match the working family credit phaseout to the federal earned income credit phaseout for tax years 2013 and following years.  (In 2011, First Special Session, chapter 7, Minnesota matched the federal extension to the phaseout threshold for tax year 2011 only).

Montana

S.B. 378, Died in Standing Committee, 4/24/2013           
Would create a state EITC at 20 percent of the federal EITC.

New Jersey

S.B. 2535/A.B. 3793,  S.B. 2535—Enacted, vetoed by Gov:  Conditional Veto, Received in the Senate, 4/15/2013, Motion To Table (21-15) (Weinberg), 5/13/2013, NOTE: A.B. 3793 was substituted with S.B. 2535, 2/14/13,
Increases state EITC to 25 percent of the federal EITC starting on January 1, 2013.

North Carolina

H.B 82/S.B. 64, H.B. 82—Enacted, signed by Governor, 3/13/2013; S.B. 64, Senate - Referred To Committee On Finance, 2/11/2013                       

Reduced state EITC for the taxable year 2013 from 5 percent to 4.5 percent. The EITC is then repealed for taxable years beginning January 2014.

Ohio

H.B. 59, Enacted, Governor's Action, 6/30/2013                              
Creates a nonrefundable state EITC at 5 percent of the federal credit and limited to 50 percent of liability for Ohio Taxable Income above $20,000.

Oregon

H.B. 360, Enacted, Signed by Governor, 10/8/2013
Increases the state EITC from 6 to 8 percent beginning on January 1, 2014.

H.B. 3367, Enacted, Signed by Governor, 8/14/2013       
Extends the sunset of the state EITC to 2020.  

Rhode Island

H 5640,  Referred to House Finance (no date specified)         
Increases the partial refund from 15 to 50 percent. Would continue to offer the state EITC at 25 percent of the federal EITC. 

South Carolina

H 3107, House Referred to Committee on Ways and Means,1/8/2013        

Creates a refundable state EITC after tax year 2012. The rate would begin in 2013 at 10 percent and then increase in increments of 2.5 percent every year until it reached 20 percent in 2016.  The rate would stay at 20 percent for all years after 2016 .

Utah

H.B. 197, House file for defeated bills, 3/14/2013 
Creates a refundable state EITC at 5 percent of the federal EITC.

Virginia

H.B. 1500, Enacted, Approved by Governor (5/3/2013)

Appropriates $185,725 to the Virginia Community Action Partnership to support the Virginia Earned Income Tax Coalition. The organization will report the statistics regarding the number of people eligible for and receiving the tax coalition’s services.

Wisconsin

A.B. 233, Assembly read first time and referred to Committee on Ways and Means, 6/4/2013

Increases the state EITC to their levels before the reduction in 2011.Under current law, as created in 2011 Wisconsin Act 32, the earned income tax credit (EITC), as a percentage of the federal credit, is 4 percent for claimants with one qualifying child, 11 percent for claimants with two qualifying children, and 34 percent for claimants with three or more qualifying children.

This bill repeals those provisions and restores former law. Under the bill, for taxable years beginning after December 31, 2012, the EITC, as a percentage of the federal credit, would be 4 percent for claimants with one qualifying child, 14 percent for claimants with two qualifying children, and 43 percent for claimants with three or more qualifying children.

Other Related  Bills

Virginia
S.B.1241/H.B.2150, S.B. 1241 Enacted, Approved by Governor, 3/21/2013; H.B. 2150 Enacted, Approved by Governor, 2/15/2013
Requires the state continue to conform to the temporary enhancements made to the federal EITC by the American Recovery and Reinvestment Act of 2009 and American Taxpayer Relief Act of 2013.
 

Source: NCSL and StateNet 2014

Additional Resources

Share this: 
Fall Forum 2014
State Vote
We are the nation's most respected bipartisan organization providing states support, ideas, connections and a strong voice on Capitol Hill.

NCSL Member Toolbox

Denver

7700 East First Place
Denver, CO 80230
Tel: 303-364-7700 | Fax: 303-364-7800

Washington

444 North Capitol Street, N.W., Suite 515
Washington, D.C. 20001
Tel: 202-624-5400 | Fax: 202-737-1069

Copyright 2014 by National Conference of State Legislatures