Tax Credits for Working Families

Weekly News Round-Up: January 20, 2012

January 20th, 2012

Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.

• To help fund a yearlong extension of the payroll tax cut and unemployment insurance program, Congressional Republicans propose requiring low-income parents claiming the refundable Child Tax Credit to provide their Social Security numbers to prove their eligibility to work in the U.S., an idea that the Congressional Budget Office has said would save about $9.4 billion over the course of a ten-year period. (Higher-income parents would still not need to provide their Social Security numbers to claim the credit.) Those opposed to the provision argue that the Child Tax Credit is for children, not their parents, and four million children who are U.S. citizens would no longer benefit from the credit. (New York Times, National Catholic Reporter, Care2)
  
  
• In his State of the State address on Tuesday, New Jersey Gov. Chris Christie pledged to restore the state’s Earned Income Tax Credit, which was cut from 25 to 20 percent of the federal credit in 2010. Last year Christie line-item vetoed a measure that would have fully restored the credit. However, it remains unclear whether the restoration of the EITC would be contingent on a 10 percent across-the-board cut to income tax rates, the cornerstone policy proposal in Christie’s speech that has garnered criticism from Democratic leaders who say the tax breaks would mostly go to the state’s wealthiest households. (My Central Jersey, NJ.com, WNYC)
  
  
• On Tuesday Missouri State Sen. Jason Crowell of Cape Girardeau introduced a bill to repeal the state’s property tax circuit breaker, available to low-income senior citizens and individuals with disabilities. Last year, the portion of the credit available to renters was targeted for repeal but ultimately surviving on a very close vote. (Columbia Daily Tribune)
  
  
• The Center for American Progress outlines 16 reforms to strengthen the middle-class, including raising the income levels for the federal Child and Dependent Care Tax Credit to help middle-class working parents afford decent child care. CAP also recommends expanding the dependent care portion of the credit so that families would be able to claim eldercare expenses when the relative does not live with the taxpayer. (Center for American Progress)
  
  
• Illinois Gov. Pat Quinn took to the Chicago Sun-Times to describe the tangible benefits of the bill he signed into law last week, which doubled the size of the state Earned Income Tax Credit over a two-year period. (Chicago Sun-Times)
  
  
• Advocacy groups and Democratic legislators in Kansas are expressing serious concerns about Gov. Sam Brownback’s budget proposal, which would cut income and business taxes while eliminating a host of credits and deductions, including the state’s Earned Income Tax Credit and Child and Dependent Care Tax Credit. According to an analysis by the Institute on Taxation and Economic Policy, the bottom 80 percent of the state’s income distribution would collectively see a tax hike under the Brownback plan, while the top 20 percent would see substantial tax cuts. (Lawrence Journal World 1, 2, Topeka Capital-Journal)

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