Council Approves Working Families Income Supplement Bill
The Montgomery County Council, on Oct.29, unanimously approved Expedited Bill 8-13. The bill would increase the County’s Working Families Income Supplement for low-income households to
- 90 percent of the Maryland refundable credit beginning in Fiscal Year 2015
- 95 percent in FY16
- 100 percent in FY17 and beyond.
The chief sponsor was Councilmember Hans Riemer. Councilmembers Roger Berliner, Marc Elrich and George Leventhal were co-sponsors.
The Government Operations and Fiscal Policy Committee, which is chaired by Nancy Navarro and includes Councilmembers Riemer and Valerie Ervin, at a worksession on Oct. 21 voted 3-0 to recommend that the full Council pass the bill with several modifications.
The bill would permit the Council to approve a lower amount in the annual operating budget by a vote of at least five Councilmembers. The minimum funding levels in the bill for the WFIS would not apply in any year that the State increases its refundable earned income credit above the current level.
Started in 1975, the EITC allows households earning income to apply tax credits to their returns. The County Working Families Income Supplement (WFIS) is derived from the federal earned income tax credit (EITC). The EITC is a refundable tax credit for lower income working families and individuals. Recipients of the WFIS include some of the lowest-paid residents of the County.
To qualify for the EITC in Tax Year 2013, a taxpayer must earn less than:
- $46,227 ($51,567 married filing jointly) with three or more qualifying children
- $43,038 ($48,378 married filing jointly) with two qualifying children
- $37,870 ($43,210 married filing jointly) with one qualifying child
- $14,340 ($19,680 married filing jointly) with no qualifying children
The Tax Year 2013 maximum credit is:
- $6,044 with three or more qualifying children
- $5,372 with two qualifying children
- $3,250 with one qualifying child
- $487 with no qualifying children
In FY11, the County had 33,840 WFIS recipients who received an average amount of $381.81 each. Restoring the County match to 100 percent would provide an additional $124, for a total of $505.81. The program encourages people to work because a recipient must have earned income to be eligible for a refund.
Twenty-two states (including Maryland), the District of Columbia, New York City and Montgomery County offer their residents a WFIS based upon the EITC.
Maryland permits residents to claim a credit of one-half of the federal EITC and provides a refund for up to 25 percent of the federal EITC. In 2000, the County began matching 100 percent of the Maryland refundable credit to help working County residents meet the high costs of living in Montgomery County. In May 2010, the Council enacted Expedited Bill 33-10, which permitted the Council to set the WFIS at less than 100 percent of the Maryland refundable credit by resolution each year.
Accordingly, the Council set the WFIS at 72.5 percent for FY11, 68.9 percent for FY12 and 75.5 percent for FY13.
On May 23, 2013, the Council appropriated funds to increase the WFIS to 85 percent of the Maryland refundable credit during FY14.