SF 422 – Earned Income Tax Credit
FLOOR ACTION:
SF 422 increases the state’s Earned Income Tax Credit (EITC) from 7 percent to 20 percent of the federal credit, retroactive to January 1, 2013. This increases the cost of the EITC to the state of Iowa from an estimated $30.2 million in FY13 to $86.2 million in FY14, an increase of $56 million. The average increase in credit for approximately 210,000 eligible taxpayers would be $264. The EITC is available to lower-income working Iowans earning less than $45,000, with the majority of the benefit going to those earning less than $21,000. Iowans eligible for the credit represent households that are home to 37 percent of Iowa’s children. Iowans earning less than $21,000 represent 20 percent of the taxpayers in Iowa, and those taxpayers pay the highest proportion of their income in state and local taxes compared to all other income groups. [3/20: 35-15 (Behn, Boettger, Breitbach, Chapman, Dix, Ernst, Feenstra, Greiner, Guth, Rozenboom, Schneider, Segebart, Sinclair, Whitver, Zumbach “no”)]