Working Pennsylvanians may be able to get a state earned-income tax credit under a bill that passed the state House of Representatives on Monday.

“For every dollar spent on the state earned income tax credit by the commonwealth, we will receive $4 back on economic growth and save $3 in social spending,” said Rep. Christina Sappey, D-Chester County, who sponsored the bill. “As a result of increased employment, Pennsylvania may see an annual benefit of over $200 million in personal income tax revenue and a reduction of $475 million in public assistance spending.”

The bill, if passed by the Senate and signed by Gov. Josh Shapiro, would provide a state earned income tax credit of 10% of the federal earned income tax credit for this year. That rate would rise every two years, with a limit of 25% of the federal tax credit. Earned income tax credits refund tax dollars to low-to-moderate income working families.

This is among other tax credit bills that House Democrats support.

Sappey said 33 states already have a state earned income tax credit for working families, and the credit supports “those who do everything right,” meaning working and earning low wages while coping with rising inflation.

“This will ensure that low to middle income families who are struggling will have additional income,” Sappey said. “This is to give families who are struggling additional resources to avoid that slide to poverty.”

A report by United Way of Pennsylvania found that while the total number of households in Pennsylvania increased by 2%, the number of households below the Asset Limited, Income Constrained, Employed threshold (those who would qualify for the earned income tax credit) increased by 7% from 2019 to 2021.

United Way of Pennsylvania President Kristin Rotz said at a May news conference there are 1.4 million hard-working Pennsylvanians who are below the ALICE threshold are “going to work every day. They are earning income that is higher than the federal poverty level but they are not able to provide for the basic needs of their families. Many of these ALICE workers are essential workers. They were the heroes of the pandemic.”

House Bill 1272 passed 122-81 with 20 Republicans joining the Democrats in supporting the bill.

Rep. Jonathan Fritz, D-Wayne and Susquehanna counties, was among the Republicans who opposed the bill. He called it a “dramatic expense” and said “the math does not work.”

“House Bill 1272 has a net effect that’s a reduction in revenue realized by Pennsylvanians without a corresponding reduction in expenses,” Fritz said.

Rep. Seth Grove, R-York County, said the program would cost $1.4 billion over four fiscal years, and raised concerns about “fraudsters” who submit erroneous tax returns. House Republican Leader Bryan Cutler of Lancaster County, echoed that sentiment.

“I would like to support a program if it had the appropriate safeguards in place, but it does not,” Cutler said.

House Majority Leader Matthew Bradford D-Montgomery County, fired back, saying that Democrats were willing to work with Republican lawmakers on the issue but they have to “get off the sidelines” and work with Democrats to find those areas of agreement.

Along with the United Way of Pennsylvania, the bill is backed by the National Federation of Independent Business Pennsylvania and Pennsylvania Partnerships for Children.

To qualify for the proposed program, the filers would have to be eligible for the federal earned income tax credit program as determined by household size and income. The program would average $200 per filer the first year, raising to $600 per filer once the rate reaches 25% of the federal tax credit. Households with more dependents and lower income would gain more benefits.

The bill will now go to the Senate for consideration where the prospects look dim.

“I’m not quite certain that we should be doing anything dramatic on the taxation level,” Senate Majority Leader Joe Pittman, R-Indiana County, told reporters during a Monday afternoon availability.

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