SB 13 repeals and reenacts Missouri’s earned income tax credit statute as the “Missouri Working Family Tax Credit Act.” The bill creates a state income tax credit for eligible taxpayers who qualify for the federal earned income tax credit (EITC), with the state credit equal to a percentage of the federal credit. Beginning with tax year 2023, the initial state credit would be 10% of the federal EITC, and it could increase in future years up to 20% if specified state revenue growth conditions are met.
The bill defines eligible taxpayers as Missouri resident individuals with certain filing statuses who are subject to Missouri income tax and who are allowed the federal EITC. The credit would be claimed on the taxpayer’s return, applied after other credits, and would not be refundable or carried forward. The Department of Revenue would be required to identify potentially eligible taxpayers who did not claim the credit and notify them, using available federal and state data. The department would also have to issue an annual report on the credits claimed and may promulgate rules to administer the program.
Impact
SB 13 would amend section 143.177, RSMo, and expand Missouri law by tying a state tax benefit directly to the federal earned income tax credit. It would create a new state income tax credit for low- and moderate-income working families, potentially reducing state income tax liability for qualifying residents. The bill also imposes administrative duties on the Department of Revenue to identify eligible taxpayers, notify them, and report annually on the credit’s fiscal impact. The credit is excluded from certain statutory requirements governing other tax credits, and its growth is conditioned on increases in net general revenue.
Sentiment
The available context suggests generally favorable policy intent, as reflected in the bill’s caption describing a modification to the Missouri Working Family Tax Credit and its focus on working families. However, no committee transcripts or recorded votes are provided, so there is no direct evidence of debate, support, or opposition in the materials supplied. Based on the text alone, the bill appears designed as a targeted tax relief measure rather than a broad tax overhaul.
Contention
The main potential point of contention is fiscal: the credit begins at 10% of the federal EITC and can rise to 20% only if state general revenue growth exceeds a specified threshold, indicating concern about limiting revenue loss. Another possible issue is administration, since the Department of Revenue must proactively identify and notify eligible taxpayers using federal and state data. The bill also makes the credit nonrefundable and non-carryforward, which may be seen as limiting its benefit to taxpayers with sufficient tax liability. No explicit opposition or support statements are included in the provided record.