An effort is underway in the Kentucky General Assembly to enact a state Earned Income Tax Credit in addition to the federal one.
A state EITC is part of the tax reform proposal being considered this session, and it’s also included in stand-alone legislation.
Democratic Lieutenant Governor Jerry Abramson says the federal EITC most often is used to purchase basic necessities and has a ripple effect in the local economy.
"What you find from the federal earned income tax credit is that it's probably the number one item that's spent immediately upon being received by working families who qualify for the earned income tax credit," explains Abramson.
The tax reform plan calls for a state EITC at 7.5% of the federal credit. Separate legislation filed by Senator Morgan McGarvey, a Democrat from Louisville, would allow at state EITC of 15% of the federal credit.
"This is an opportunity to encourage all the right values - work, responsibility, family, and fairness," comments McGarvey. "Ronald Reagan called the EIC the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress, and we need to embrace that opportunity in Kentucky."
If approved by the legislature, Kentucky would be the 25th state to have a state EITC.