Today, Harrisburg lawmakers heard testimony about a proposed Working Pennsylvanian Tax Credit. The incentive, if passed, would be for working households just above the poverty line.

In Pennsylvania, 28% of households are at this awkward income threshold described as ALICE— Asset Limited, Income Constrained, Employed. They make more than the poverty level, they work, but they are living pay check to paycheck… and are often one big expense from becoming unstable (like an emergency room visit or a car repair).

The Earned Income Tax Credit at the federal level gives this population a significant refund on their taxes.

Pennsylvania Representative Chris Sappey (D-Chester) wants to expand the credit to the state level. In her H.B. 820, if a Pennsylvanian was already approved for the federal credit, they could apply at the state level, and get 30% of their federal EITC taken off their state taxes.

Sappey estimates this would be $650 back for the average, eligible Pennsylvanian household.

Advocates at today’s hearing said the credit promotes workforce development.

"Because these are only available to workers with at least some earned income, and because the benefits increase with each additional dollar earned until the maximum credit is reached— the credit is designed to incentive and reward employment for families with low income,” Leah Reynolds said, CEO of Kennett Area Community Service. She was one of today’s testifiers.

"The EITC leads to new entrants into the workforce and greater work hours among those already employed because it increases the financial returns for each additional hour of work,” Reynolds said.

Sappey introduced this same bill last session, and it received some Republican support (around 20 votes) when it passed the House. It never passed the Senate.

As a tax credit, the program would draw down state revenues. With many other policies clamoring for funds this year, Rep. Keith Greiner, the Republican chair of the House Finance Committee, thanked testifiers for their work today, but noted the political party is prioritizing balanced budgeting this year.