Senate committee sends bill that would create a low-income tax credit to the floor for final vote


(Leah Hogsten | Tribune file photo) Rep. John R. Westwood is sponsoring an earned income tax credit bill that is supported by conservative and liberal groups. Nov.19, 2014.

The Senate Revenue and Taxation Committee supported a bill that would create a new state tax credit for very low-income workers who come from families with a history of poverty.

HB57 is now awaiting a Senate floor vote. The bill, already passed by the House, would allow about 25,000 people to claim a credit of up to $600 a year, 10 percent of the federal version of the Earned-Income Tax Credit. The bill would cost the state about $6 million.

If senators approve the bill on a first vote, it will be held for final passage until later in the session because of its price tag. Lawmakers weigh budget priorities to determine which bills are priorities.

Utah would become the 30th state to approve the credit, and the bill has support from liberal and conservative groups, as well as the Salt Lake County Council.

“There’s a downside to this that we ought to be very cognizant of,” Sen. Curtis Bramble, R-Provo, said before the committee sent the bill to the floor on Thursday. “Between 20 and 25 percent of earned income tax credit payments are either in error or fraud.”

Bramble and supporters said the state is aware of potential abuse and is preparing precautions to prevent it. The committee unanimously approved the bill.


Provide an income tax credit for working poor people. - Read full text

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Filed Law Introduced in House House Committee House passage Senate Committee Senate passage Governor's OK

Jan. 30: Utah House passes bill that would give poor workers with a history of poverty up to $600 a year

The Utah House voted to pass a bill that would allow about 25,000 low-income workers whose families have a history of poverty to claim a tax credit of up to $600.

The credit proposed in HB57 is widely heralded as a way to help workers in low-paying jobs lift themselves out of poverty with little government assistance.

Despite bipartisan support when a House committee voted unanimously to send it to a full House vote, 32 Republicans – including some in leadership and high-level budgeting positions – voted against the bill on the floor. It still passed 41-32. It now goes to the Senate.

“It’s a cost-effective way to help working families that need it most,” the bill’s sponsor, Rep. John Westwood, R-Cedar City, said on the House floor.

HB57 was one of two bills on an agenda to help low-income Utahns this session that passed the House floor on Tuesday. HB12, which will expand Medicaid to cover long-lasting birth control for low-income women, was also sent to the Senate.


Poor, working families would get up to $600 more a year under proposed tax credit that’s got momentum in the Legislature

With the backing of conservative and liberal groups, lawmakers are moving ahead with a bill that would create a state tax credit for some of Utah’s working poor families, a credit that’s viewed as a key way to help families find their way out of poverty with limited state assistance.

HB57 cleared a House committee unanimously Tuesday, the second day of the 45-day legislative session.

The bill would allow nearly 25,000 people whose families have a history of poverty to claim a new state earned income tax credit worth as much as $600 a year — 10 percent of a popular federal credit. Those eligible are people who work low-income jobs, qualify for the federal credit and file state taxes, and have a long history of poverty.

“It’s a cost-effective way to help families that need it most,” said Rep. John Westwood, R-Cedar City. “This is a tailored bill to those that need it most.”

Experts view the earned income tax credit as a key way to help families out of poverty. The bill would be targeted to people whose families have been in poverty and government dependence for at least two generations.

Lawmakers have proposed the bill several times in recent years, including last year, but have struggled to overcome concerns of the price tag.

HB57 would cost about $6 million starting in 2020, according to Westwood. That’s significantly less than the $25 million lawmakers proposed in 2014 that passed the House but failed in the Senate, but up about $1 million from a bill last year.

To qualify for the federal credit, a single person with one child could make up to $39,617, according to federal guidelines. A married couple with three or more children could make up to nearly $54,000. The average credit under the Utah credit proposed in the bill would be about $240.

House Minority Leader Brian King, D-Salt Lake City, said this year may be the best chance at passing the bill. Tax experts expect Utah will get a windfall from the federal tax changes on top of the additional money it has to spend thanks to a booming economy.

But King thinks the bill should cover more working people, noting about 200,000 more working people receive the federal tax credit but won’t be covered by the proposed state credit, according to information from Voices for Utah Children, which is supporting the bill.

“If anything we’re too targeted. We’re too small,” King said, who added he’d still support the bill as is. “There are a ton of families who don’t fall on that intergenerational poverty list that could definitely use” the help.