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Louisiana’s Earned Income Tax Credit: See If It’s Time To Expand This Plan

The IRC launched an EITC Awareness Day on January 27.
The IRC launched an EITC Awareness Day on January 27. (Photo: Refundtalk)

The Earned Income Tax Credit (EITC) is a federal tax credit for working people and families with low and moderate incomes. Louisiana also has its own state-level EITC, which provides additional benefits to working families. 

In recent years, there have been calls to expand Louisiana’s EITC to provide even more support to working families and help reduce poverty in the state.

Chicago Governor JB Pritzker reminds its residents to claim the federal Earned Income Tax Credit (EITC) and the Illinois Earned Income Credit (EIC).

Chicago Governor JB Pritzker reminds its residents to claim the federal Earned Income Tax Credit (EITC) and the Illinois Earned Income Credit (EIC). (Photo: Charles Rex Arbogast / AP Photo)

The EITC is designed to help working families keep more of their hard-earned money. The credit is based on a percentage of a taxpayer’s earned income and increases with the number of qualifying children. 

ProPublica said the federal EITC provides a maximum credit of $6,660 for families with three or more children. In contrast, NOLA said Louisiana’s EITC provides a maximum credit of 5% of the federal EITC.

Expanding Louisiana’s Earned Income Tax Credit

Expanding Louisiana’s Earned Income Tax Credit would provide additional financial support to working families, helping them to make ends meet and achieve financial stability. 

A report from ActionNetwork.Org said the expansion would benefit nearly 500,000 families in Louisiana. In particular, Earned Income Tax Credit actually helps nearly a quarter (28%) of all Louisianan households.

This additional support could make a significant difference in these families’ lives, helping them pay for necessities like food, housing, and childcare.

In addition to helping families make ends meet, expanding Louisiana’s EITC could also have broader economic benefits. 

The EITC has been shown to boost the economy by encouraging people to work and increasing consumer spending. 

ALSO READ: EITC Awareness Day: More People Are Eligible For Credit With These Significant Improvements

This can lead to the creation of jobs and the growth of local businesses.

Expanding Louisiana’s EITC would also align its tax policies with those of other states that have already expanded their EITCs.

Urban.org said 28 states, including the District of Columbia, have state-level EITCs that provide additional benefits to working families.

 By expanding its EITC, Louisiana could better compete with these states in attracting and retaining workers and businesses.

Takeaway

A strong case exists to be made for expanding Louisiana’s Earned Income Tax Credit. The credit provides important financial support to working families, helps boost the economy, and aligns the state’s tax policies with those of other states. 

With the right support, expanding Louisiana’s EITC could be a step towards reducing poverty and improving the financial stability of working families in the state.

RELATED ARTICLE: Governor Pritzker Reminds Eligible Taxpayers To Take Advantage Of Earned Income Tax Credit

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