Woonsocket residents receive EITC, benefit could increase

Woonsocket residents receive EITC, benefit could increase

WOONSOCKET – More than 4,624 tax filers in the city of Woonsocket received more than $11,314,000 in federal dollars from the Earned Income Tax Credit in 2013 – providing local residents and businesses with much needed dollars.

The EITC – a tax benefit for workers earning $50,000 or less – helps families make ends meet and supports the economy as families spend their money locally. Rhode Island also has a state EITC that is currently set at 12.5 percent of the federal credit which puts an estimated $1,414,000 back in the pockets of local residents.

“The paychecks of too many Rhode Island workers have fallen behind in recent years and the EITC is a common sense strategy to help workers make up the difference,” said Rachel Flum, Executive Director of the Economic Progress Institute. “Since low-wage workers are more likely to spend that money locally, the EITC is really a win-win – helping both families and local economies.”

Gov. Gina Raimondo has included a proposal in her budget to increase the EITC to 15 percent of the federal credit, and the General Assembly is considering other proposals to increase it 20 percent. The return on investment of this policy change would be significant. The EPI estimates that increasing the EITC to 20 percent would not only put $12 million in pockets of Rhode Island working families, but add approximately $15 million to the economy through a multiplier effect.

For tax filers in Woonsocket, a state EITC increase to 20 percent of the federal credit would put an estimated $2,263,000 back into the economy.

The Economic Progress Institute is a nonpartisan research and policy organization dedicated to improving the economic well-being of low- and modest-income Rhode Islanders. Visit www.economicprogressri.org.