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Lawmakers consider increase to Indiana earned income tax credit

Rep. Chuck Goodrich (R-Noblesville) has pushed legislation for years to increase Indiana's earned income tax credit as a way, he said, to address generational poverty. (Lauren Chapman/IPB News)

A state lawmaker says his bill to increase Indiana’s earned income tax credit would be a huge boost to addressing generational poverty.

The credit is meant for lower-income people and families. Income limits are based on the number of children you have.

To be eligible, families with two or more children can earn up to about $49,000. And right now, those families could get a credit on their state taxes of just over $600.

Under Rep. Chuck Goodrich’s (R-Noblesville) bill, HB1290, that would go up to more than $900.

“So, we know that the money that is returned from their taxes will actually go right back into the economy,” Goodrich said.

READ MORE: The Earned Income Tax Credit: How Does It Work?

Join the conversation and sign up for the Indiana Two-Way. Text "Indiana" to 73224. Your comments and questions in response to our weekly text help us find the answers you need on statewide issues and throughout the legislative session.

Kathryn Williams represents Lafayette Urban Ministry, which helps low-income Hoosiers. She said the credit makes a huge difference in people’s lives.

“One of the people could afford to buy a used car so she could continue working as a home health aide," Williams said. "Somebody else was able to afford to move out of a home that had bad rental conditions, to move into a better place.”

According to the Urban Institute, Indiana is one of 31 states with an earned income tax credit (in addition to the federal EITC). Only five states have a credit lower than Indiana's current level.

A House committee heard testimony on the bill Wednesday but did not vote on it.

Contact reporter Brandon at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

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