Bill review: Eliminate State EITC (CT)

[DTrim99]

Bill Review: Eliminate State EITC

Reform ID: ct-sb69 | State: CT
Bill text: https://www.cga.ct.gov/2026/TOB/S/PDF/2026SB-00069-R00-SB.PDF
Description: Eliminates Connecticut's state Earned Income Tax Credit (EITC), which currently provides 40% of the federal EITC to eligible low-income working families, plus a $250 bonus per qualifying child.

Merging this PR will publish the bill to the dashboard.

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What we model

Provision	Parameter	Current	Proposed
CT EITC Match Rate	gov.states.ct.tax.income.credits.eitc.match	40% of federal EITC	0% (eliminated)
CT EITC Child Bonus	gov.states.ct.tax.income.credits.eitc.qualifying_child_bonus.in_effect	$250/child	Eliminated

Validation

External estimates

Source	Estimate	Period	Link
No official fiscal note	—	—	—

Back-of-envelope check

CT EITC provides 40% of federal EITC
Federal EITC max ~$7,830 (3+ children) → CT max ~$3,132 + $250 bonus
~15% of CT households claim EITC
Rough estimate: 200,000 households × $900 avg = **$180M**

PE vs External comparison

Source	Estimate	vs PE	Difference
PE (PolicyEngine)	+$184M	—	—
Back-of-envelope	~$180M	+2%	Excellent

Verdict: PE estimate aligns well with back-of-envelope calculation.

Parameter changes

Parameter	Period	Value	Bill Reference
gov.states.ct.tax.income.credits.eitc.match	2026-01-01	0	Section 1 (repeal of § 12-704e)
gov.states.ct.tax.income.credits.eitc.qualifying_child_bonus.in_effect	2026-01-01	false	Section 1 (cascading from EITC repeal)

Key results

Metric	Value
Revenue impact	+$183,701,328 (savings from eliminating EITC)
Poverty rate	20.07% → 20.50% (+2.1%)
Child poverty rate	16.63% → 17.60% (+5.8%)
Winners	0.0%
Losers	15.1%

Decile impact

Decile	Relative Change	Avg Impact
1	-0.54%	-$115
2	-0.47%	-$223
3	-0.43%	-$276
4	-0.38%	-$295
5	-0.15%	-$143
6	-0.06%	-$70
7	-0.08%	-$114
8	-0.02%	-$26
9	-0.02%	-$48
10	~0%	-$1

Lower-income deciles (1-4) are most affected, with households losing $115-$295 on average.

District impacts

District	Avg Impact	Winners	Losers	Poverty Change	Child Poverty Change
CT-1	-$151	0%	15%	+1.6%	+4.7%
CT-2	-$111	0%	13%	+1.3%	+4.0%
CT-3	-$151	0%	15%	+2.8%	+6.2%
CT-4	-$138	0%	16%	+3.3%	+8.5%
CT-5	-$149	0%	16%	+1.6%	+4.1%

Note: CT-4 shows highest child poverty increase (+8.5%), despite being known for affluent areas, indicating pockets of low-income working families.

Reform parameters JSON

{
  "gov.states.ct.tax.income.credits.eitc.match": {
    "2026-01-01": 0
  },
  "gov.states.ct.tax.income.credits.eitc.qualifying_child_bonus.in_effect": {
    "2026-01-01": false
  }
}

Related Issues

• PolicyEngine-US issue to fix child bonus eligibility check: CT EITC child bonus should check state EITC eligibility, not federal policyengine-us#7468

Versions

• PolicyEngine US: 1.579.0
• Dataset: policyengine-us-data v1.48.0
• Computed: 2026-02-23

[PavelMakarchuk]

Household Earnings Sweep: CT ct-sb69

Household: Single parent, 2 children (ages 5, 12)
Year: 2026

Summary:

• Max loss: -$3,176 at $21,307 earnings
• Affected earnings range: $402 – $58,291
• Eliminating CT's EITC hurts low-income working families most, with losses concentrated in the $15k–$30k range

Generated by generate_household_chart.py