Louisiana Updates EITC Income Levels and Required Posting

The Louisiana Workforce Commission raised the income amount for workers eligible to reclaim 3.5 percent of their federal tax payments.

Income eligibility is tiered based on marital filing status and number of children; for example married workers filing jointly and claiming three or more children, the income the State bumped the income threshold to $52,427 in 2014, up from $51,567 in 2013.

At 3.5 percent, Louisiana has the lowest percentage federal tax credit return rate of the 25 states and the District of Columbia that offer earned income tax credits (EITCs). By contrast, Maryland offers the highest rate at up to 50 percent of the federal credit.

In the United States, the EITC program is the third largest social welfare program after Medicaid and food stamps. According to the Louisiana Department of Children and Family Services, the EITC program “lifts more families above the poverty level each year than any other federal program”.

The Louisiana Budget Project estimates that the State’s EITC programs returns $45.5 million to Louisiana workers.

What is an Earned Income Tax Credit?

An Earned Income Tax Credit (EITC) allows low-income families with at least one employed member paying in to the tax system to claim a refundable tax credit on their tax filings that reduces their overall tax burden.

What is Earned Income?

Earned income includes all taxable income and wages, including:

  • Wages, salaries, and tips
  • Union strike benefits
  • Disability benefits received before you reach minimum retirement age
  • Net earnings from self-employment

Mandatory Changes to Louisiana Earned Income Credit Posting

Every employer in Louisiana is required to post the Louisiana Earned Income Credit posting. The 2014 version of the posting includes significant revisions to income eligibility requirements for workers, and employers should remove previous versions and display the latest version.

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