Tax Cut for Low-Income Working FamiliesSeptember 7, 2021
The new state budget includes an increase in Connecticut's Earned Income Tax Credit, which is a direct tax cut for qualifying families.
Not only were there no tax increases in the budget passed by the legislature, an important provision will put more money in the pockets of hard-working Connecticut families through increased tax credits.
Under the newly enacted budget, the Earned Income Tax Credit increased from 23% to 30.5%.
The Connecticut Earned Income Tax Credit is a refundable state income tax credit for working individuals and families. Qualifying Connecticut workers can now deduct 30.5% of their earned income from their annual state taxes. To qualify, individuals must have an adjusted gross income that is less than:
- $51,464 ($57,414 married filing jointly) with 3 or more qualifying children;
- $47,915 ($53,865 married filing jointly) with 2 qualifying children;
- $42,158 ($48,108 married filing jointly) with 1 qualifying child; or
- $15,980 ($21,920 married filing jointly) with no qualifying children.
This increase will result in an additional $40 million delivered to the nearly 195,000 eligible households to assist with necessary expenses such as groceries, transportation, housing and more.
This is another way that our state budget supports the working families and residents across the state, especially those who were impacted most by the pandemic.