(The Center Square) – North Carolina Democrats have proposed more legislation to restore the state’s income tax credit.
Senate Bill 576, dubbed the Recovery Refund for Working Families Act, would set North Carolina’s income tax credit at 20% starting in fiscal year 2021. Project sponsors said nearly one million low-income residents in North Carolina North Carolina who qualified could receive an extra $ 500 back with the proposal.
Canton resident MaryBeth Cochran said the extra money would help families similar to hers that are struggling to cover their basic needs during the COVID-19 pandemic.
Cochran worked at Kmart before the pandemic to supplement her disability check and look after herself and her four grandchildren. The store closed last summer after Cochran was licensed. Cochran said she now relies on food pantries and the state’s food assistance program for meals, she is overdue on her bills and can no longer afford her medication.
“If this bill became law, my family would receive about $ 500 more each year at tax time,” said Cochran on Wednesday during a news conference. “Those extra dollars would mean food on the table, winter heat, shoes for my growing kids [and] medications doctors say i need. It is money that we can use to start covering basic items like utilities, transportation and housing. “
Income tax credits earned can be used to reduce the amount of taxes that someone owes and can result in an increase in tax refunds. The amount of the credit varies according to how much the person earns and the number of dependents.
State income tax credits can be combined with federal credit for low-income taxpayers to reduce their state income tax liability, according to the IRS.
North Carolina implemented a 2007 income tax credit in 3.5% of the federal credit and increased the rate to 5% in 2008. It was reduced to 4.5% in fiscal 2013 before being eliminated in 2014. Critics of labor income credits believe they can increase tax return errors.
The measure was co-sponsored by Sens. Kirk deViere, D-Cumberland; Michael Garrett, D-Guilford; and DeAndrea Salvador, D-Mecklenburg. A similar bill will be introduced in the House this week, lawmakers said.
“The time has passed to bring that tax credit back, to get aid into the hands of the people who need it most, so that we can ensure that everyone in North Carolina has the opportunity to succeed,” said Garrett. Wednesday.
North Carolina Democrats have also filed for Senate Bill 181, which would set North Carolina’s earned income tax credit at 5% in fiscal year 2021 through fiscal year 2025. Tax researchers estimate that SB 181 can result in at least $ 120 million in tax credits.