Governor Chet Culver has signed into law a bill that eases the tax burden on low-income families in Iowa. The new legislation increases the state’s "earned income tax credit" from six-and-a-half to seven-percent. It also makes the tax credit refundable — ensuring a refund for those who in the past weren’t eligible because they didn’t earn enough.

"By making the tax credit refundable, tens of thousands of Iowa families will no longer be required to pay taxes on their state income," Culver says. The governor expects 160,000 Iowans to pay less in state income taxes as a result of the tax change.

The governor says the legislation’s timely because in recent years, low-income Iowans have experienced greater financial hardship due to increased state taxes. Culver signed the bill into law during a ceremony Tuesday inside the Old Capitol in Iowa City.