By Richard L. Gaw
Staff Writer

A bill put forth in the State House of Representatives by State Rep. Christina Sappey that if passed would provide nearly one million Pennsylvanians with a tax credit on their personal income taxes received bipartisan support on May 5, and now heads to the Senate for consideration. 

House Bill 820 – known as the Working Pennsylvanians Tax Credit - would provide eligible taxpayers with a state tax credit equal to 30 percent of their federal Earned Income Tax Credit. 

Sappey said the federal Earned Income Tax Credit (EITC) is widely regarded as the most successful anti-poverty program of the last 50 years, and if H.B. 820 is voted into law, the commonwealth would join 31 other states who have their own tax credit 

Sappey shared that those Pennsylvanians whose household income falls under the classification of Asset-Limited, Income-Constrained and Employed (ALICE) would benefit most from the new bill. In 2022, nearly 41 percent of Pennsylvania’s were at or below ALICE-income levels, meaning that they earn above the federal poverty level but struggle to meet the cost-of-living standards.

“All over our state, lower- and moderate-income working families are struggling to make ends meet,” Sappey said. “These are often dual-income households in lower wage jobs trying to make their rent and car payments, pay for child and health care, and put food on the table each day. When the cost of these things can’t be met, both our economy and these families suffer.

“ALICE households are one unexpected car repair, energy bill or medical bill from falling seriously behind. And when they do, it impacts all of us. Employers lose workers. Businesses lose customers, dollars are not being spent in communities and when ALICE families get too far behind, they have nowhere to turn but to government social safety net programs. We can prevent this from happening.”

Sappey said the Working Pennsylvanians Tax Credit would benefit nearly one million Pennsylvanians and range from $200 to $2,000 depending on family size and income, in addition to the credit they already receive at the federal level. For communities, this means more people can keep working, more money is invested in local businesses and there is less demand for social support.

“A state credit that mirrors the federal credit is a smart investment in our workforce and our economy,” Sappey said. “For every dollar spent on a state EITC, Pennsylvania would receive four dollars back in economic growth and save three dollars on social spending.”

To contact Staff Writer Richard L. Gaw, email [email protected].