Modifies provisions relating to the Missouri working family tax credit act and makes the tax credit refundable
One of the notable impacts of HB 1478 is its potential to increase disposable income for families with lower earnings, thereby stimulating economic activity within local communities. By making the tax credit refundable starting from tax years after January 1, 2026, it provides an additional safety net for taxpayers whose credits exceed their tax liabilities. This could particularly benefit families that previously did not benefit from the earned income tax credit due to their tax situation, thereby broadening the support base of the tax credits.
House Bill 1478, known as the Missouri Working Family Tax Credit Act, seeks to amend the existing tax structure by providing tax credits to eligible residents who qualify under specific federal criteria. The bill will allow residents a tax credit equating to a percentage of the federal earned income tax credit (EITC) that they are entitled to, enhancing financial support for low-income families. This change is aimed at alleviating some of the financial burdens faced by working families within the state and is set to take effect beginning in the 2023 tax year.
While the bill has drawn support for its focus on assisting working families, there may be contention regarding its financial implications on the state budget. Critics may raise concerns about the sustainability of the tax credits, particularly the requirement that general revenue must exceed certain levels before tax increases take effect. Adjustments to funding and potential impacts on state revenue streams are critical points of debate as legislators ponder the balance between providing relief to families and maintaining fiscal responsibility.