Legislation that would increase the standard deduction for personal income taxes and the refundable Earned Income Tax Credit is introduced in the Delaware House of Representatives.
The bill aimed at providing tax relief for working Delawareans was a big part of Gov. John Carney’s budget proposal in January.
If passed, it would increase the standard deduction for personal income taxes by 75% in the 2024 tax year. That would be $5,700 for an individual, and $11,400 for a couple.
It would also increase the Earned Income Tax Credit to 7.5% of the federal credit for this year. This increase would enable nearly 20,000 tax filers to have net liability reduced to $0 or receive EITC funds.
State Rep. Paul Baumbach is the bill’s House sponsor, and he says there are other benefits for Delaware residents.
"By raising it it's going to enable tax filers to have a simpler process of filing. So that's really important for them,” said Baumbach. “Then on the EITC side it's not big dollars, but these are families where it doesn't take a lot of big dollars make a big difference. Having that raised and really having that come up to speed with some of our nearby states on how much it matches the federal program is wonderful, and it's important."
Despite the recent Delaware Economic and Financial Advisory Council projections of a decline in personal income tax revenue, Baumbach says the plan is for this bill to go forward.
"The governor didn't sneak it in, he announced it as a clear, fundamental part of what he was proposing. I expect and hope that it will not be affected by DEFAC as long as it doesn't change markedly between now and June," said Baumbach.
Baumbach adds there’s already substantial support for this legislation, and he believes it will even garner support from across the aisle.
