Delaware Governor Announces Tax Relief Package for Working Families

Strategic Insights -

Governor John C. Carney introduced House Bill 89, a tax relief package that increases the standard deduction and Earned Income Tax Credit (EITC) for working families in Delaware. The legislation aims to help thousands of Delawareans lift their take-home pay, cover expenses, and ease the tax burden. The bill, sponsored by Representative Paul Baumbach and Senate Pro Tem Dave Sokola, adjusts the income thresholds and provides a real benefit for the middle class.

Key Takeaways:

  • House Bill 89 increases the standard deduction by 75 percent to $5,700 for an individual ($11,400 for a couple) effective Tax Year 2024.
  • The 7.5 percent increase to the EITC enables nearly 20,000 tax filers to have net liability reduced to $0, or receive EITC refunds.
  • The tax relief package is expected to benefit over 370,000 tax filers, with almost 50,000 expected to switch to the standard deduction.
  • More than 80 percent of residents who would benefit from this tax relief package have a Delaware Adjusted Gross Income below $75,000.
  • The federal Earned Income Tax Credit is a proven anti-poverty program for working families, and Delaware's legislation builds on its success.
  • Lt. Governor Bethany Hall-Long praised the bill, stating, "The middle class is the backbone of our economy. Increasing the standard deduction and EITC is common sense policy."
  • Representative Paul Baumbach highlighted the importance of the refundable Earned Income Tax Credit program, which he led efforts to introduce several years ago.
  • Senate President Pro Tempore Dave Sokola expressed pride in serving alongside Representative Baumbach as the Senate prime sponsor of this legislation.

Statistics:

  • $5,700: new standard deduction for an individual in Tax Year 2024
  • $11,400: new standard deduction for a couple in Tax Year 2024
  • 20,000: number of tax filers who could have net liability reduced to $0 or receive EITC refunds
  • 370,000: total number of tax filers expected to benefit from the tax relief package
  • 50,000: number of tax filers expected to switch to the standard deduction
  • 80 percent: percentage of residents with a Delaware Adjusted Gross Income below $75,000

Sources:

  • News release from Gov. John C. Carney
  • Statement from Representative Paul Baumbach
  • Statement from Senate President Pro Tempore Dave Sokola
  • Statement from Lt. Governor Bethany Hall-Long
  • Original text from Delaware News Bureau: https://news.delaware.gov/2023/03/20/legislation-introduced-to-provide-middle-class-tax-relief-for-working-delawareans/