Connecticut House passes state income tax cut, boosts state EITC. The House budget bill that the Connecticut Senate is expected to pass would reduce the two lowest marginal state income tax rates. The 3 percent rate on the first $10,000 earned by single filers ($20,000 for joint filers) would drop to 2 percent. The 5 percent rate on the next $40,000 earned by single filers ($80,000 for joint filers) would drop to 4.5 percent. The tax cut would phase out for single filers earning more than $105,000 ($210,000 for joint filers). The bill also increases the state earned income tax credit (EITC) from 30.5 percent of the federal EITC to 40 percent.
Texas Gov. and Lt. Gov. continue to disagree over property tax relief. Lt. Gov. Daniel Patrick (R) asked the Texas House to return to work with the Texas Senate on special session legislation. He criticized House passage of a property tax bill that only includes “compression” and not an increased homestead exemption. Gov. Greg Abbott (R) maintains that the House bill is the best way to provide property tax relief. Patrick has invited Abbott to debate the issue next week.
A $2.5 billion “oops” puts Massachusetts state tax relief plans in limbo. Auditors have learned that the Baker administration spent $2.5 billion using federal funds instead of state dollars. The money, which went toward jobless benefits during the COVID-19 pandemic, should have come from state coffers. It’s unclear whether the erroneously spent $2.5 billion will upend legislative tax relief plans set to be released in the next two weeks.
Will federal tax credits help New Jersey’s burgeoning wind industry? Ørsted, the state’s first developer of an offshore wind project, and EEW American Offshore Structures (a manufacturer) want to use federal tax credits to help offset unanticipated increases in project costs that arose during the pandemic. The Treasury Department is still working to determine what costs will be considered eligible under the federal tax credit program.
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