We already knew there would be no additional child tax credit stimulus checks going out on January 15. Because of the Senate’s schedule of business over the next few weeks, though, it’s starting to look like the body has also foreclosed the possibility of getting something done in time to send out checks in February, too. Underscoring, for the moment, our contention about stimulus checks from recent days. Namely, that any stimulus-related benefits people get in the early part of this year will depend on where they live. For proof, just look no further than what Connecticut is doing with its expansion of the earned income tax credit there.
Everybody’s got an idea for tax breaks in Connecticut
According to news reports in Connecticut from recent days? The combination of a state budget surplus plus an election this year means voters are on the winning end of the equation. Thanks to the fact that, as a result of those conditions, state officials are actually sort of competing with each other to see who can offer more generous tax breaks.
Almost 200,000 people in the state, for example, will get a boost from an enhanced state income tax credit. Lamont announced just a few days ago that he’s directing a state agency to retroactively enhance the state’s 2020 earned income tax credit. It’s going from 23 percent of the federal credit to 41.5 percent.
That enhancement will benefit 198,708 Connecticut households that earned up to $56,844 in 2020. Those are households that also filed for the 2020 earned income tax credit. “The amount of each household’s enhanced credit is need-tested and depends on the size of its federal credit,” Lamont’s office announced. The IRS calculates the credit based on taxpayers’ income, marital status, and the number of qualifying children.
“For example, a single parent of two at the federal poverty level who received a $1,246 state credit in the spring will now receive an additional $1,002 for a total state credit of $2,248.”
Other tax cuts
According to the Hartford Courant newspaper, meanwhile, Lamont will also push for an expansion of the state’s property tax credit during the upcoming session of the General Assembly.
Not to be outdone, Republicans in the state Senate on Tuesday called for a temporary state sales tax cut. As well as doing away with the additional 1 percent tax on meals at restaurants and supermarkets altogether. A reminder, again, that inaction at the federal level does not preclude US state officials from being as aggressive as they want to be when it comes to tax relief.
Child tax credit payments
Speaking of inaction at the federal level? The political dynamic in the Senate regarding more child tax credit checks hasn’t changed. Democrats still need every single one of their members on board. But West Virginia’s Joe Manchin is not only still refusing to support President Biden’s proposed extension.
Manchin on Tuesday said he wouldn’t support more child tax credit checks. Without, that is, the addition of a work requirement of some kind for parents.
The Senate, for the moment, is prioritizing voting rights reform. That’ll be the focus for the next couple of weeks. Which pushes a return to negotiating a child tax credit extension even further down the line.