Relating To The Earned Income Tax Credit.
The passage of HB183 is expected to have a significant impact on state tax revenue, as it will increase the total tax relief available to eligible families. By extending the EITC benefits to families with dependents, the bill aims to address the economic challenges faced by low-income households, which often struggle with the costs associated with raising children. Proponents of the bill argue that this enhancement will help reduce poverty levels and improve the financial stability of families in Hawaii.
House Bill 183 aims to amend Hawaii's existing earned income tax credit (EITC) by allowing qualifying individual taxpayers to claim an additional refundable tax credit of ten percent of the federal EITC for each dependent under the age of eighteen. This proposed change seeks to enhance the financial support provided to low-income families, thereby incentivizing work while also offering additional relief to those supporting dependents. The bill intends to apply to taxable years beginning after December 31, 2024, ensuring that the alterations take effect next tax season.
While there may be widespread support for enhancing the earned income tax credit as a means of supporting low-income families, possible points of contention could arise regarding the implications for the state budget. Critics might raise concerns about the potential for increased fiscal pressure on state finances due to the larger tax credits offered. Additionally, debates could surface over the criteria for who qualifies as a dependent and what constitutes an eligible taxpayer, leading to discussions about fairness and equity in tax policy.