JEFFERSON CITY • Low-income residents across Missouri could qualify for state tax credits under a proposal advancing in the Legislature.
In action Wednesday, the Missouri House voted 115-35 to provide the working poor with an income tax credit equal to 20 percent of any earned income tax credit claimed by the taxpayer on his or her federal income tax return.
It would go into effect for the 2017 tax year.
The plan, which now heads to the Senate for further debate, would affect individuals with incomes below $14,800 and families, depending on size, with incomes of up to $53,900. The average amount being returned to families would range between $54 and $289, according to figures provided by the Missouri Budget Project.
In 2013, an estimated 515,000 Missouri families took advantage of the federal credit. In the city of St. Louis, a Brookings Institution report from 2014 shows nearly 41,000 families took the federal credit.
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The sponsor, Rep. Michael Kelley, R-Lamar, said the estimated cost to the state of between $56 million and $62 million would be offset by increased economic activity.
“That money is going to go back to your local community,” Kelley said. “It’s simply a tax cut for working families.”
The measure, which is similar to programs in 27 other states, had bipartisan support.
“That money gets immediately injected back into local economies,” said Rep. Jeremy LaFaver, D-Kansas City. “It will be a shot to Missouri’s economy.”
The legislation is House Bill 1605.
