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Implementing a State Earned Income Tax Credit

A state EITC would provide a much-needed boost to Floridians
June 30, 2020

Latest Update

Bills proposing a state EITC, HB 1021 and SB 1592, were not heard in any committee in 2020.

Tax fairness and EITC

One of the most significant barriers to economic opportunity is Florida’s tax system – the state’s lack of a state income tax and heavy reliance on sales and use taxes mean that Floridians with low and moderate income contribute a greater share of their income to state and local taxes, compared to higher-income Floridians.

The growing inequity underlying Florida’s economy creates an unstable foundation for our future. A robust economy, in which economic prosperity is accessible to everyone, is critical for weathering future economic downturns and creating opportunities for the future workforce. A state Earned Income Tax Credit (EITC) modeled after the federal EITC program is a proven tool to boost family income today and create broadly shared prosperity for the future.

Federal EITC an Important Anti-Poverty Tool

The federal EITC helps to mitigate the growing inequality and burden on families by providing a tax credit for low- and moderate-income workers. The credit amounts to a percentage of a worker’s earnings, up to a maximum, and then phases out as income increases. The credit amount also increases with family size. Given these two parameters, the federal EITC specifically benefits working parents with children. In fact, 97 percent of federal EITC benefits go to families with children.

In 2017, the EITC lifted about 5.7 million people out of poverty, including about 3 million children. During the 2017 tax year the average EITC was $3,191 for a family with children, which boosted wages by about $266 a month, according to the nonpartisan Center on Budget and Policy Priorities. 

A State EITC Would Help Make Our Tax System Fairer

Thirty states have their own version of the EITC. In 2019, a bill was introduced that would have created a “working families tax rebate,” which would provide families with up to 10 percent of their federal EITC. Legislation creating a state EITC was introduced in 2020. 

We support legislation that would establish a state EITC or working families tax rebate.

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Related Resources
Nov 2019

A State Earned Income Tax Credit Program Would Bolster Working Families in Florida

A State Earned Income Tax Credit Program Would Bolster Working Families in Florida

Jan 2020

Earned Income Tax Credit Crucial for Working Families

Earned Income Tax Credit Crucial for Working Families

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