State Sen. Kristen McDonald Rivet’s first piece of legislation, which would expand Michigan’s Earned Income Tax Credit, was passed Tuesday by the Michigan Senate’s Housing and Human Services Committee.
The bill is scheduled for a Senate vote later this week.
Members of the Michigan EITC Coalition praised this decision as the bill would expand the tax credit from a 6 percent match of the federal credit to 30 percent. Of states with their own EITC, Michigan currently has one of the lowest percentages in the country. The passage of Senate Bill 3 will make Michigan a national leader in better supporting workers, delivering approximately $600 more annually to struggling working families.
“I’ve been working on this issue for years so I am over the moon excited,” said McDonald Rivet, D-Bay City. “You only need to go to your local grocery store and try to buy food for a week for a family to know that families that are living at the bottom edge of our income scales really need some help and they need it right now…This is something we can do immediately. We have the resources at the state to make it happen and I cannot see a reason why partisan bickering would get in the way of this.”
Senate Bill 3 would apply retroactively, providing the tax cut to filers for the 2022 tax year, immediately helping Michigan families dealing with the effects of high inflation.
The bill is supported by more than 230 groups from around Michigan, including influential state business, religious, health and social services organizations, as well as both Republicans and Democrats.
“It is not political, it’s not partisan,” McDonald Rivet said. “It’s good for Michigan and I expect that we will have significant Republican support.”
State Rep. Bill G. Schuette, R-Midland, agreed that Michigan families will benefit from immediate help. Earlier this month, Schuette introduced legislation with the retroactive component, allowing people to obtain relief on their upcoming tax returns as opposed to waiting a year or more under initial Democrat proposals.
“I’m pleased Senate Democrats have started to respect that urgency by changing their approach to reflect what we’ve initially proposed and making this credit retroactive to the 2022 tax year,” Schuette said. “I’m hopeful this will continue to be a component of plans that move forward. Let’s pass immediate tax relief for all Michiganders. Hard-working families are counting on it.”
McDonald Rivet estimates the bill could be up for Gov. Whitmer’s approval as soon as February.
“I’m very hopeful that it will maintain a very high level of support as it moves through the process and hope that it would be on the governor’s desk as early as next month,” she said.
She explained that two-thirds of EITC recipients only receive the credit for two years.
“It is meant to be a reward for work that helps create a path for families that are economically fragile and working,” she said.
The EITC is a refundable Federal Credit established in 1975 by Michigan’s own President Gerald Ford, with support from both Democrats and Republicans. It was later expanded by President Ronald Reagan. The Michigan EITC was started in 2006 with bipartisan support.
Benefits only go to working taxpayers and phase out at higher incomes, ending at $57,414 for a couple with three dependents.
More than 730,000 Michigan households received the state EITC in 2019 – impacting nearly one million Michigan children – putting nearly $110 million back into Michigan’s economy. McDonald Rivet’s proposal would boost that by $460 million to an estimated $570 million.