The federal earned income tax credit is meant to help households under a certain income level.
The checks stem from a Michigan law that retroactively increased the state’s version of the EITC. It takes effect on February 13, 2024.
Lieutenant Governor Garlin Gilchrist said the extra money will help families in need.
“We know that stuff is expensive, groceries are expensive. And so, to be able to have a little bit more money in your pocket from the State of Michigan, we think that lays a foundation for economic security for people in Michigan at a time when so many people are still feeling insecure,” Gilchrist told reporters after a press conference in Lansing Wednesday.
During the gathering, speakers discussed how having extra money from the EITC helped them and those in their communities out during hard times.
Michigan’s expansion grew the state’s supplement to the EITC from 6% of the federal credit to 30%.
Democratic legislative leadership had hoped residents would be able to see the change reflected in tax refunds received this year. But Republican opposition to business incentive spending and other provisions that had been looped into the law kept it from receiving enough support to go into effect immediately — hence the need to send out additional refund checks in February 2024.
The idea of expanding the EITC itself, however, has received bipartisan support.
Despite the popularity of the program, some policy analysts have expressed concerns about its ability to lift people out of poverty.
James Hohman is director of fiscal policy at the Mackinac Center for Public Policy. He said the credit allows too many people to qualify.
“It can matter to a lot of people, as a lot of redistribution programs should be, but lawmakers should be focused on helping the people who need it most. And there are better options than the earned income tax credit,” Hohman said.
The state estimates around 700,000 families will qualify for an average refund check of about $550.
Hohman said it’s worth acknowledging that there are people who need help that may not officially meet federal poverty guidelines. But he said policymakers should spend their time focusing on targeted efforts.
“Lawmakers can do a lot more to help families in poverty if they agree that eligibility assistance needs to be targeted at families that need it. Because unfortunately, too much of the discussion today is about expanding eligibility to families that don’t need assistance,” Hohman said.
At Wednesday’s press conference, state Representative Emily Dievendorf (D-Lansing) embraced the EITC while making the case for more programming aimed at helping low-income residents.
“I think the more we can do to ensure that folks have the ability to meet their most basic needs, the better. And, this is not the beginning, it’s not the middle, it’s not the end, we will continue to be doing everything we can to ensure that folks are not struggling and we’re building a strong foundation,” Dievendorf said.
The governor’s office says families who claimed the EITC on their 2022 tax returns will automatically receive the new refund checks in the mail once they’re printed.
