The constant struggle to meet financial obligations is too common for lower income working households in PA. The United Way of Pennsylvania (UWP) refers to these working individuals and families, living paycheck to paycheck, as ALICE, Asset Limited, Income Constrained, Employed. These workers aspire to advance in the workplace, own a home, and other markers of financial stability that enable them to direct their own lives. Therefore, I am proposing the enactment of the Working Pennsylvanians Tax Credit, a 30% refundable state Earned Income Tax Credit (EITC) to help eligible working Pennsylvania households achieve their goals.

According to the most recent ALICE Report , the ALICE population increased by 50,379, or 1%, from 2021 to 2022 in Pennsylvania. For these families, the Working Pennsylvanians Tax Credit will provide much-needed assistance with the costs of child care, food, transportation, clothes, and other household expenses. If Pennsylvania had the Working Pennsylvanians Tax Credit in 2023, the average eligible family would have received a tax credit of approximately $650 from the Commonwealth in 2024.

This investment in our working households will also provide a return to our Commonwealth in the form of savings and economic growth. Per the UWP fiscal impact report, “Implementing a State Earned Income Tax Credit (EITC) in Pennsylvania: A Benefit-Cost Analysis,” for every $1 spent on a 30% state EITC, Pennsylvania receives $1 back in economic growth and saves $2 dollars in human services spending. The total summary of benefits to the Commonwealth is estimated at nearly $2 billion according to the report.

Since 1975, the federal government has been incentivizing work through the EITC. By design, the credits are refundable and grow with each additional dollar of earnings until they reach their maximum value. The federal EITC accounts for approximately $70 billion in tax credits to about 26 million families annually, making it the largest anti-poverty program in the United States. Today, 31 states, the District of Columbia, Guam, and Puerto Rico offer a tax credit against income taxes. It is time for Pennsylvania to join them.

Please join me in co-sponsoring this critical investment in our workforce, which is also an investment in our Commonwealth.

Statutes/Laws affected:
Printer's No. 0824: P.L.6, No.2