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Our opinion: Credit provides more tax relief

There is a bipartisan push in the state Senate to enact an Earned Income Tax Credit in Pennsylvania. It is an idea whose time has come for the commonwealth.

The Earned Income Tax Credit helps low- to moderate-income workers and families get a tax break. Those who qualify can use the credit to reduce the taxes they owe or increase their refund. The federal government has offered the credit since 1975, but several states also have a statewide Earned Income Tax program for state taxes.

In January, the United Way of Pennsylvania called for state legislators to approve an Earned Income Tax Credit after a study showed that for every $1 in cost to the state budget, a refundable credit will generate a return of $7 from additional state and local tax income, business revenue and reduced spending on public assistance.

A state credit is projected to increase workforce participation and work hours, reduce child poverty, reduce the number of low birth-weight babies, reduce child maltreatment and foster care entry, boost educational attainment, increase access to health insurance coverage among children, reduce violent crime and help prevent adult suicides.

When a state credit is combined with the current Pennsylvania tax forgiveness program, one in four Pennsylvanians would be receiving some form of state income tax relief.

There are regularly proposals introduced in the state Legislature for targeted programs to help groups — like restaurant owners and restaurant workers — recover from the COVID-19 pandemic. An Earned Income Tax Credit would help those who need help the most keep more of their hard-earned money.

We’re not sure why Pennsylvania has opposed an Earned Income Tax Credit in the past, but it’s time for that opposition to end.

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