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Groups seeking state-based earned income tax credit, informational meeting Friady

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A meeting in Rome on Friday involving nonprofits that feed the hungry will attempt to gain support for expanding a federal tax credit to the state level that would benefit an estimated 1 million Georgia families.

Action Ministries Rome, the Atlanta Community Food Bank, a supplier of the Bagwell Food Pantry in Rome, and the Georgia Budget and Policy Institute will host an information session in Rome.

The organizations are seeking to rally support for the implementation of an earned income tax credit at the state level.

The information session, which will include lunch, will be held at First Presbyterian Church, 101 E. Third Ave., from 11:30 a.m. to 1 p.m. Friday.

In a letter of invitation to the event, the groups claim that an earned income tax credit could be a financial boost for over a million families in the state.

The federal earned income tax credit benefits low-income workers, where income taxes are offset through refundable tax credits based on income, marital status and number of children.

Wesley Tharpe, director of research for the GBPI, said the impact of the tax credit on both the state budget and individual families would depend on how much of a state match lawmakers would choose to adopt.

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“They have a lot of leeway in determining how large they want to make the credit,” Tharpe said. “Other states that have adopted this policy have set their state match at anywhere from 3 percent to 40 percent.”

Tharpe explained the state would base its credit at a specific percentage of the federal credit. For example, if the state were to set its match at 5 percent, based on the federal credit of $3,000, the state credit would be $150.

“If Georgia were to start small with a 5 percent state match, that would cost the state about $150 million a year,” Tharpe said.

He said a married couple in Georgia with two eligible and dependent children, making about $29,000 a year, currently pays about $500 in state income taxes.

“A 5 percent match would cut that about in half,” Tharpe said. “Most eligible families would see a benefit of a few hundred dollars at most.”

“I think for many of our clients’ families that could be very impactful,” said Nichole Fannin, regional director of Action Ministries. “We are excited about the event so that we can learn and ask questions and identify opportunities that would be beneficial for our clients.”

According to the GBPI, for the 2013 tax year, 29 percent of Floyd County households, 10,450 families, claimed the federal earned income tax credit and would be eligible for a state credit. A fact sheet prepared by the agency estimates if Georgia lawmakers adopted a 10 percent match it would pump another $2.57 million in disposable income into the local economy.

The GBPI said that 32 percent of households in Polk County could potentially qualify, 34 percent in Chattooga and 27 percent in Bartow for a total of about $4.5 million.

According to the Internal Revenue Service web­site:

Qualifications for the federal EITC include an individual must have earned income above $1, such as payment from a job or earnings from running their own business or farm; must have a filing status of single, head of household, married filing jointly or qualifying widow or widower.

The rules will vary by filing status; however, taxpayers who are married and file jointly could claim up to three or more children for the earned income credit on their tax return.

“If you can legally claim that child as a deduction then that counts as one of the children,” said Evie McNiece, an accountant with Accounting Solutions of Rome, 1101 E. Second Ave.

The Internal Revenue Service website has a lengthy test to determine the eligibility for the earned income tax credit as it relates to qualifying children.

“Since Georgia annually talks about different types of tax reform this is something that could be included in the discussion,” said Josh McCosh, deputy director of communications for the GBPI. Tharpe said, to his knowledge, the state earned income tax credit has not been a part of tax reform discussion in recent legislative sessions.

“We are trying to build momentum around the state for the idea that this is an affordable investment that could really boost Georgia families,” Tharpe said.

GPBI is trying to educate lawmakers and get this on their radar.

People interested in attending the meeting are encouraged to send an email to Jennifer Owens at jowens@gbpi.org by Wednesday.