The Iowa Senate has voted unanimously to beef up a tax break for the working poor. The proposal would increase the state’s "earned income tax credit" by half-a-percent, but more importantly the legislation makes it refundable. That means Iowans who don’t earn enough to owe taxes can still get a refund.
Senator Becky Schmitz, a Democrat from Fairfield, says that’s how the federal tax credit works. "The credit has been used for investments in paying off debts, investing in education and securing better housing," she says. "It’s also been a good support for families working to be off the welfare system and be more independent by providing more take-home pay for the families for child care and health care."
Experts estimate more than 100,000 Iowans would qualify for a refund of more than $100, for a total of about 10-million in refunds. Senator Keith Kreiman, a Democrat from Bloomfield, says it’s well worth it. "These are working Iowans, many of them two parents both working and we’re going to bring just a little bit more money — or let them keep a little bit more money in that household to take care of their kids," Kreiman says.
The new tax break must also be approved by the Iowa House and the governor before it becomes law.