Bill > HB1571

This bill modifies the Missouri Working Family Tax Credit Act by establishing a state-level earned income tax credit that is linked to the federal earned income tax credit (EITC). The bill defines an eligible taxpayer as a Missouri resident who qualifies for the federal EITC and allows them to claim a state tax credit equal to either 10% or 20% of their federal EITC amount, depending on state revenue conditions. Initially, the tax credit is non-refundable, meaning taxpayers cannot receive a refund if the credit exceeds their tax liability. However, starting January 1, 2026, the credit will become fully refundable. The percentage of the credit can increase to 20% only if net general revenue in the previous fiscal year exceeds the highest revenue of the three prior fiscal years by at least $150 million. The Department of Revenue is required to proactively identify and notify potentially eligible taxpayers and must prepare an annual report detailing the tax credits issued, including total revenue expended and average credit values across different income ranges. The bill aims to provide additional financial support to working families with low to moderate incomes by complementing the federal earned income tax credit.