Cash-strapped working families in Michigan could find some much-needed relief through a proposal from Governor Gretchen Whitmer to boost Michigan’s Earned Income Tax Credit (EITC).
Increasing the EITC, a tax cut for working families, would give a typical combined tax refund of $3,000 to 730,000 Michiganders, providing assistance to spend where money is most needed — pay the bills, buy groceries, etc.
“Raising the state EITC puts Michiganders first by putting nearly $3,000 back in their pockets when paired with the federal EITC,” Whitmer said. “Michiganders who work full-time but still can’t get ahead deserve to keep more of their hard-earned dollars. As part of the MI New Economy plan, I set an ambitious goal of lifting 100,000 working families out of poverty. Delivering on this tax cut for working families will pull over 22,000 Michiganders out of working poverty and make significant progress towards that goal while raising incomes for 730,000 workers and benefitting nearly 1 million kids — nearly half the kids in Michigan. This refund for working families is a game-changer for so many Michiganders, and I know we can work together to get this done.”
“As policymakers look for productive, proven solutions to address the financial challenges facing Michigan workers and families, improving the state EITC should be near the top of the list,” said Monique Stanton, president and CEO of the Michigan League for Public Policy. “Increasing the Michigan EITC will directly help nearly 750,000 households make ends meet while getting spent at local businesses on immediate expenses like groceries, clothing and school supplies for kids, car repairs and more. This one-two punch of economic impact bumps up everyone’s bottom line and benefits every corner of the state.”
Boosting the EITC back to its original amount would pull over 22,000 Michiganders out of working poverty and help over 730,000 people keep the heat on, repair their car, or pay an apartment deposit. Nearly 1 million kids — almost half of the kids in Michigan — would benefit from raising the EITC. It means new backpacks, warmer coats and more hot meals.
During Whitmer’s annual State of the State address held on Wednesday, January 26, she spoke about numerous tax relief-related topics including the importance of the EITC.
Whitmer also announced tax credits of up to $9,600 to assist employers and small business owners to hire Michiganders for jobs to help fill labor shortages and grow the economy. Whitmer is encouraging employers to apply for the Work Opportunity Tax Credit, prioritizing funding for veterans and returning citizens, to ensure that the state continues its strong job growth.
“The Work Opportunity Tax Credit puts Michiganders first by helping small businesses save money and fill labor gaps by hiring Michiganders for good-paying jobs,” said Whitmer. “Thanks to this tax credit, we will be able to add even more jobs to the 145,000 jobs that we’ve created this year alone. Small businesses in communities across our state can save thousands of dollars for hiring workers who are seeking a good-paying job, including our veterans, those who have paid their debt to society and others who are traditionally left out or left behind. We will continue finding ways to invest in small businesses and help them thrive as we usher in a new era of prosperity for Michigan.”