6 states have hiked a tax credit for the working class  — but not Michigan

By: - July 17, 2019 10:14 am

Updated, 6:17 a.m., 7/18/19 with Rep. Witwer’s legislation

A proposal by Gov. Gretchen Whitmer to increase Michigan’s Earned Income Tax Credit (EITC) has largely failed to gain traction. But states around the country — including one of Michigan’s neighbors — are doing just that. 

A new report by the Center on Budget and Policy Priorities (CBPP), a progressive policy think tank in Washington, D.C., notes that six states — California, Minnesota, New Mexico, Ohio, Oregon and Maine — have raised their EITC rates this year. 

States with EITCs | Center on Budget and Policy Priorities chart

The EITC serves as a boon for working families, according to the federal government. According to the nonpartisan Michigan League for Public Policy (MLPP), almost 757,000 Michigan families, raising more than 1 million children, received a state EITC at an average of $145 in 2015.

As the Advance has previously reported, Whitmer touted an increase of the EITC — which was slashed during the tenure of her predecessor, Republican former Gov. Rick Snyder — as an offsetting measure to her proposed 45-cent gas tax increase as part of her Fiscal Year 2020 budget proposal. She also proposed getting rid of the so-called “pension tax.”

Michigan League for Public Policy Chart 


“The state and federal EITC is one of the best policies to reduce poverty at lawmakers’ disposal, and with Gov. Whitmer’s proposed restoration, we are hopeful that Michigan will soon be added to the list of states that have expanded their state credit,” said MLPP spokesman Alex Rossman. 

“Too many people in Michigan are working but still struggling, and the EITC directly addresses that, helping working families stay afloat. And the EITC benefits small businesses, too, as it is spent in local communities on groceries, car repairs and other necessities.”

Currently, low-income Michigan residents can claim on their tax return 6% of the federal EITC and Whitmer wants it increased to 12%. The EITC was 20% before Snyder slashed it. 


Per the Internal Revenue Service (IRS), individuals qualify for the EITC based on income levels in which they must make less than:

  • $15,270 if single with no qualifying children
  • $49,194 if single with three or more qualifying children
  • $20,950 for families with no qualifying children
  • $54,884 for families with three or more qualifying children

Since Whitmer introduced her budget in March, the Democrat has focused on fixing roads and schools, with Republicans roundly rejecting her gas-tax increase proposal. Rossman said that the EITC should be something both sides can agree on. 

Gov. Gretchen Whitmer at Affirmations in Ferndale, June 3, 2019 | Derek Robertson

“The EITC almost always had strong bipartisan political and public support, and there’s no reason it shouldn’t now,” he said.

Whitmer spokeswoman Tiffany Brown said in an email that the governor “does continue to discuss the EITC and retirement tax repeal as relief for residents as part of the budget presentations she is giving across the state.”

Brown added that she doesn’t want to “speculate on what the legislature will or won’t do. … It has been 130+ days since Governor Whitmer put forth her recommended budget — that’s 130+ days without a comprehensive solution from the Legislature.”


Whitmer made a similar point in a colorful tweetstorm last week.

Michigan’s GOP-controlled Legislature has so far resisted a gas tax increase and largely been silent on calls for boosting the EITC, which has support from Democrats in both the state House and Senate. State Sen. Jeff Irwin (D-Ann Arbor) has legislation increasing the EITC to 30% and state Rep. Angela Witwer (D-Delta Twp.) introduced a bill hiking the rate to 20%.*

The deadline to have a new budget in place is Sept. 30.

Advance Editor Susan J. Demas contributed to this story.

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Nick Manes
Nick Manes

Nick Manes is a former Michigan Advance reporter, covering West Michigan, business and labor, health care and the safety net. He previously spent six years as a reporter at MiBiz covering commercial real estate, economic development and all manner of public policy at the local and state levels.