SC State Legislators pass a State Earned Income Tax Credit

Earned Income Tax Credit logo

The SC Association for Community Economic Development along with many partner advocates worked for years to lower taxes on low-wage South Carolinians and their families through a refundable state-level EITC worth 20 percent of the federal credit.

On May 11, 2017 a nonrefundable EITC worth 125% of the federal credit was tacked on to the "Roads" bill by Democratic lawmakers in an attempt to mitigate the burden of a proposed gas tax on lower-income workers. Governor Henry McMaster (R) vetoed the legislation on Wednesday for reasons unrelated to the EITC, but the legislature overrode his veto today, and the bill goes into effect July 1.

"Although the enactment of a state-level EITC will bring much-needed tax relief to many low-wage South Carolinians, the credit could benefit many more if it were eventually made refundable. Those earning the least owe little to no income tax and are often unable to benefit from nonrefundable EITCs, despite paying other taxes like sales and payroll. According to the Institute on Taxation and Economic Policy, only about 2% of South Carolinians with the lowest incomes (below $21,000) will benefit from the new EITC. Eventually making the credit refundable would help more of these families make ends meet. to sustain and enhance their programs, activities, and services." - Tax Credits for Workers and Their Families (TCWF)