Vice President for State Fiscal Policy
Maryland lawmakers this month passed, and Governor Larry Hogan is expected to support, legislation to expand the state’s Earned Income Tax Credit (EITC) to an estimated 40,000 more low-income Marylanders by lowering the eligibility age for workers not raising children in their home from 25 to 18. That will help many young workers who are just entering the workforce and supporting themselves on very low wages.
Maryland will become the second state to adopt this type of expansion, joining Minnesota. The District of Columbia previously expanded its credit for childless workers by raising the income limit and the size of the credit.
Expanding state EITCs for workers without children in the home helps the credit offer a hand up to all workers struggling on low wages. The federal EITC largely leaves out these workers, even though they’re integral members of their communities and local economies — and many are non-custodial parents or future parents. It reaches far fewer childless workers than workers with children because childless workers under age 25 are ineligible and the credit phases out at very low income levels for this group. It also offers workers without children a much smaller benefit than those with children. Partly as a result, childless workers are the lone group that federal income and payroll taxes push into poverty, or deeper into poverty.
Policymakers from both parties — most recently Senator Sherrod Brown and Rep. Ro Khanna, along with dozens of co-sponsors — have proposed to expand the federal EITC for these workers. But those efforts haven’t advanced to date, so states should continue to take the lead.
Other states may join Maryland in improving their EITCs this year. Lawmakers in California, Hawaii, New Jersey, Massachusetts, Minnesota, and Vermont are considering increasing the value of their credits, mainly for families with children, and Missouri is considering creating a credit. Twenty-nine states plus D.C. now have EITCs, which build on the federal EITC by keeping people on the job and reducing hardship for working families and children. They also extend the federal EITC’s well-documented long-term positive effects on children, boosting the nation’s economic prospects.
||In 2014, the District of Columbia extended the reach of its EITC to childless workers with incomes up to about 200 percent of the poverty line for an individual and set its value at 100 percent of the federal EITC.|
||In 2017, Minnesota expanded eligibility for its state EITC to childless workers aged 21 to 24.|
||In 2018, Maryland expected to expand eligibility for its state EITC to childless workers aged 18 to 24.|