Finance Committee reviews governor’s personal income tax proposals; estimated $13.5 million annual cost

The Finance Committee met virtually on Feb. 8 to review personal income tax proposals in the governor’s fiscal plan, including changes to the child tax credit, the state Earned Income Tax Credit (EITC) for taxpayers without dependents, the Social Security income exemption and the treatment of military retirement and survivor benefits.

The presentation, delivered by Patrick Jettison, summarized estimated revenue effects and program details the administration included in the budget request. "These 4 provisions, 13 and a half million," Jettison said when asked about the combined cost of the four personal income tax proposals in the governor’s package.

Why it matters: The proposals would change who qualifies for credits and exemptions and would reduce state tax revenue by an amount the presenter and the tax office estimated at roughly $13.5 million annually (for the four items together). Committee members pressed for clarifications about eligibility rules, filing behavior among low-income taxpayers and how the measures interact with federal rules and other state supports.

Key proposals and estimated impacts

- Child tax credit: The governor would raise the age cutoff for the state child tax credit from children ages 5 and younger to children ages 6 and younger. Jettison said the change would expand the number of age-eligible children by about 18.5% and increase…