Council approves Working Families Income Supplement Bill altering requirements for residents to qualify for the tax credit

Council approves Working Families Income Supplement Bill to expand eligibility for the tax credit

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For Immediate Release

Council Vice President Gabe Albornoz and Councilmembers Nancy Navarro and Sidney Katz spearheaded legislation for County residents after the state expanded eligibility requirements for Marylanders

ROCKVILLE, Md., June 15, 2021— Today the Montgomery County unanimously approved Expedited Bill 14-21, Finance – Working Families Income Supplement–Amendments, which alters certain requirements for residents to qualify for the Working Families Income Supplement (WFIS). Council Vice President Gabe Albornoz and Councilmembers Nancy Navarro and Sidney Katz were the lead sponsors and Council President Tom Hucker and Councilmembers Andrew Friedson, Craig Rice and Evan Glass were cosponsors.

“It is vital that all of our families have access to the Working Families Income Credit,” said Council Vice President Albornoz, chair of the Health and Human Services Committee. “These families contribute to our economy and communities in so many ways. Ensuring their success will help ensure our County's success.”

“I am proud to join my colleagues today in voting for this important piece of legislation, which will implement changes made at the state level and expand program eligibility to more families,” said Councilmember Navarro, chair of the Government Operations and Fiscal Policy Committee. “We need to always be on the lookout for new opportunities to bring more services to more people, and that is exactly what this bill does. As Chair of the Government Operations and Fiscal Policy Committee, I have consistently advocated for the Working Families Income Supplement because I see it as one of several key tools in our toolkit to elevate our vulnerable residents from poverty. As we begin our economic recovery, we need to ensure that all our residents have access to vital programs that help meet basic needs and provide a foundation for future economic success.”

“This change in the requirements for families to receive the Working Families Income Supplement will be so very helpful to so many families struggling from the impacts of COVID-19 and beyond,” said Councilmember Katz, chair of the Public Safety Committee. “I am pleased to join my colleagues in this effort to assist our community.”

“I'm thrilled that the Council has expanded eligibility for the Working Families Income Supplement,” Council President Hucker said. “This program rewards work, encourages people to re-enter the workforce, and now, even more workers who contribute to our community and our economy will reap the benefits.”

Bill 14-21 amends the requirements to allow a resident who qualifies for either the federal or state earned income credit (EITC) to be eligible for the County’s Working Families Income Supplement. This amendment to the County Code expands the eligibility for residents who are individual taxpayer identification number (ITIN) holders and qualify for the state EITC, and thereby, eligible for the local earned income tax credit. The bill applies to tax years 2020 through 2022 and sunsets on January 1, 2023.

Previous law required that in order to claim the WFIS tax credit, a resident must be eligible and qualify for both the federal and state earned income tax credit. It is important to note that Montgomery County is the only county in Maryland that offers a local income tax credit for its residents with a 100 percent match of the state earned income tax credit for the applicable tax year.

As of December 2017, the Federal Tax Cuts and Jobs Act (TCJA) made significant changes to the individual income tax, including qualifications for the EITC. A taxpayer and their dependents must have a valid social security number (SSN) to be eligible for the federal EITC. As a result of the change in the law, many taxpayers who are within the poverty level and issued an IRS ITIN because they do not qualify for a SSN, are exempt from applying for the EITC.

On March 5, 2021, the Maryland General Assembly enacted Senate Bill 218 – Child Tax Credit and Expansion of the Earned Income Credit. The emergency bill expanded eligibility requirements of the state and local earned income tax credits, which also increased the state and local poverty level credits, by allowing additional taxpayers to claim the tax credits without the federal requirement to have a valid social security number.

The Council staff report can be viewed here.

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