House passes Sappey’s Working Pennsylvanians Tax Credit bill
Proposed legislation would bolster economy and support Pa.’s workforce
Southeast Delegation May 6, 2025 | 4:45 PM
HARRISBURG, May 6 – The state House today passed legislation authored by state Rep. Christina Sappey, D-Chester, that would provide nearly a million working Pennsylvanians a state-level tax credit on their personal income taxes.
House Bill 820 would provide eligible taxpayers with a state tax credit equal to 30% of their federal Earned Income Tax Credit. Residents who qualify for the federal credit would automatically qualify for the state-level credit.
“All over our state, lower- and moderate-income working families are struggling to make ends meet,” Sappey said. “These are often dual-income households in lower wage jobs trying to make their rent and car payments, pay for child and health care, and put food on the table each day. When the cost of these things can’t be met, both our economy and these families suffer.”
Sappey said the federal Earned Income Tax Credit is widely regarded as the most successful anti-poverty program of the last 50 years. If her bill is enacted, Pennsylvania would join 31 other states in having its own state tax credit to enhance the federal EITC’s impact.
According to Sappey, Pennsylvania’s ALICE households would benefit the most from adopting a state-level EITC. ALICE households are asset-limited, income-constrained and employed. They earn above the Federal Poverty Level but often struggle to meet the basic cost of living. In 2022, nearly 41% of Pennsylvania’s households were at or below the ALICE Threshold.
“ALICE households are one unexpected car repair, energy bill or medical bill from falling seriously behind. And when they do, it impacts all of us. Employers lose workers. Businesses lose customers. Dollars are not being spent in communities. And when ALICE families get too far behind, they have nowhere to turn but to government social safety net programs. We can prevent this from happening,” Sappey said.
Sappey said the Working Pennsylvanians Tax Credit would benefit nearly 1 million Pennsylvanians and range from $200 to $2,000 depending on family size and income, in addition to the credit they already receive at the federal level. For communities, this means more people can keep working, more money is invested in local businesses and there is less demand for social support.
“A state credit that mirrors the federal credit is a smart investment in our workforce and our economy,” Sappey said. “For every dollar spent on a state EITC, Pennsylvania would receive four dollars back in economic growth and save three dollars on social spending.”
The bill now heads to the Senate for consideration.