Governor Ned Lamont’s office said in an announcement Wednesday that the extra tax refunds, which will be given to families that already benefit from the state’s earned income tax credit program, will give economic support to those “disproportionately burdened by COVID-19 and its negative economic impacts.”
The Connecticut Department of Revenue Services will act retroactively to boost its 2020 tax credit from 23 percent of the federal credit to 41.5 percent. The boost will apply to all households that earned up to $56,844 in 2020 and filed for that year’s earned income tax credit.
“Enhancing the 2020 Connecticut Earned Income Tax Credit provides direct relief to workers doing their best to provide for their families while confronting pandemic-related costs from masks and tests to childcare and internet access,” Lamont said in the announcement.
The $75 million bill for the credit boost will be funded by the remainder of Connecticut’s $1.38 billion coronavirus relief money. The state also used the relief funds to buy PPE, boost COVID-19 testing access and provide financial support to schools, small businesses, hospitals and other bodies affected by the pandemic.
The state revenue department plans to send the refund checks to eligible recipients before the end of February.
The amount of each household’s payment will ultimately depend on the size of their federal tax credit, which the IRS calculates based on a taxpayers’ income, marital status and number of qualifying children. A single parent of two, for example, whose income meets the federal poverty level and who received a $1,246 state credit in the spring will now receive an additional $1,002, according to Lamont’s office.
The Connecticut earned income tax credit was created in 2011 and has had varying rates over the last decade.
Republican legislators criticized Lamont for deciding on his own to send checks to people who will already benefit form an earned income tax credit expansion that was included in the last state budget.
House Minority Leader Vincent Candelora and Rep. Holly Cheeseman, the ranking House Republican on the Finance Committee, issued a joint statement that said the money could be spent on other “urgent issues” such as funding for domestic violence organizations, reducing the unemployment fund debt that businesses will have ultimately have to repay, or implementing a COVID-19 testing program to keep students in school.
“This unilateral, retroactive change to tax policy made by Governor Lamont isn’t just political pandering,” they said, “it’s a slap in the face to the legislature.”
The Associated Press contributed to this report.