Tax Credits for Working Families

Missouri May Soon Have Its Very Own EITC

April 28th, 2016

By Kate Skochdopole

Lawmakers in Missouri are closer than ever to enacting a state-level Earned Income Tax Credit (EITC).

HB 1605, which the House is considering, would create a nonrefundable EITC equal to 20 percent of the federal credit. State advocates estimate that the bill would help as many as 515,000 Missouri families become financially stable.

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News Round-up: April 25, 2016

April 25th, 2016

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

  • Rep. Mike Coffman (R-Colo.) introduced a bill that would expand the federal EITC for  childless workers. The Enhancing Advancement, Reducing Noncompliance and Improving Trust (EARN IT) Act not only increases the maximum EITC for filers without dependent children, but also lowers the eligibility age from 25 to 21 (Ripon Advance).
  • We wrote about a new podcast episode from the Scholars Strategy Network that examined how Americans really feel about paying taxes (TCWF).

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Despite Negative Rhetoric, Most Americans Think Taxes Are a Good Idea

April 21st, 2016

Most Americans are agreeable to the idea of paying taxes, and many would even support paying more to improve the services they care about, according to a recent episode of “No Jargon,” a weekly podcast from the Scholars Strategy Network.

The episode featured Vanessa Williamson, a fellow at the Brookings Institution, who discussed how many Americans may grouse about their tax forms every April but, when surveyed, actually think they pay the right amount in taxes and would not mind paying more if their dollars funded programs like education and infrastructure.

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News Round-up: April 18, 2016

April 18th, 2016

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

  • Senators Cory Booker (D-NJ) and Jerry Moran (R-KS) announced a bipartisan plan – the Refund to Rainy Day Savings Act – to give workers the option to increase the amount of their Earned Income Tax Credit (EITC) and other tax refunds by putting a portion of the payment into savings (The New York Times, CFED, TCWF).
  • Despite strong momentum throughout the legislative session, a bill to expand Maryland’s EITC for childless workers did not pass after it was coupled with a costly proposal to increase tax breaks for higher-income earners (Baltimore Sun).

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A Bipartisan Plan to Help Low-Wage Workers Save for a Rainy Day

April 13th, 2016

Earlier today, Senator Cory Booker (D-NJ) and Senator Jerry Moran (R-KS) announced a plan to give workers the option to increase the amount of their Earned Income Tax Credit (EITC) and other tax refunds by putting a portion of the payment into savings.

The Refund to Rainy Day Savings Act seeks to expand year-round financial security for millions of Americans by allowing them to defer 20 percent of their tax refund into a Treasury-held savings account that would collect interest over six months and be returned to the taxpayer at a higher amount. This program would be available to the more than 80 percent of Americans who receive a tax refund each year, but could be especially effective for those with low wages who use their entire refund to pay off debt and are left with little or no emergency savings after tax season.

RainyDay_web_FINAL_750

Credit: CFED

According to the Corporation for Enterprise Development (CFED), one in every three Americans has no financial savings at all, and nearly half of all Americans are considered “liquid asset poor,” meaning they lack enough savings to handle an unexpected emergency like a car accident or a lost job.

The legislation also establishes a three-year pilot expansion of the existing Assets for Independence program to evaluate the impact of growing locally-based savings incentives for lower-income workers without increasing federal funding. To read more about the Refund to Rainy Day Savings Act, click here.

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News Round-up: April 11, 2015

April 11th, 2016

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

  • As states like California and New York raise their minimum wages to $15 per hour, some pundits argue that the Earned Income Tax Credit (EITC) is a better strategy for reducing poverty and incentivizing work. But Eric Reed at The Dallas Morning News wrote, and many experts agree, that the two policies are complementary and that the economy is better off when states increase both together (Dallas Morning News).
  • The Maryland legislature must act by this evening to pass bills to increase the state’s EITC for childless workers. The Senate’s version of the bill contains a controversial tax cut for the highest-income earners (Baltimore Sun, Washington Post, Reading Eagle).

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Complex Family Structures Could Be Contributing To EITC Error Rate

April 7th, 2016

By Kate Skochdopole

As the number of children born to unmarried parents continues to increase, many non-traditional families are struggling to navigate the complex tax code, which could be contributing to high tax credit error rates.

In a piece out today, NPR’s Yuki Noguchi investigated how households with unmarried parents are trying to make sense of tax regulations, file correct returns, and access the credits and benefits they earn. She found that the path to an accurate return is not an easy one for these non-traditional families. For instance, one low-income filer she interviewed said he spent over ten hours trying to file this year’s return.

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News Round-up: April 4, 2016

April 4th, 2016

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

  • Republican state legislators in Delaware introduced a package of bills to combat poverty across the state with the goal of making Delaware the lowest-poverty state in the nation by 2024. The eleven bills included a measure to make the state’s Earned Income Tax Credit (EITC) refundable (Delaware Online, Delaware State News).
  • One week remains in the 2016 Maryland General Assembly session, leaving lawmakers little time to decide if an expansion of the state’s EITC should be coupled with a tax break for high-income earners (WBAL TV).

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States Without EITCs Score Poorly on Social Justice Indicators

March 31st, 2016

By Lauren Pescatore

A new study of all 50 states conducted by Loyola University New Orleans’ Jesuit Social Research Institute (JSRI) finds that inequity is most severe in the Gulf South states, most of which do not offer a state-level Earned Income Tax Credit (EITC).

The JustSouth Index evaluates levels of social justice across states using indicators under the categories of poverty, racial disparity and immigrant exclusion. Across all three categories, Alabama, Georgia, Louisiana, Mississippi, New Mexico and Texas ranked lowest in the nation. Only two of these states, Louisiana and New Mexico, offer state-level EITCs and for relatively small amounts: 3.5 percent and 10 percent of the federal credit, respectively. By comparison, Connecticut, Massachusetts and Vermont, all of which offer state-level EITCs at nearly 1/3 the size of the federal credit, ranked well above average.  

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News Round-up: March 28, 2016

March 28th, 2016

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

  • Andrew Hanson of Real Clear Policy encouraged presidential candidates to support and expand the reach of the Earned Income Tax Credit (EITC), specifically by indexing the size of the credit to a city’s cost of living. Because the real value of an EITC benefit is higher in cities with a lower cost of living compared with big cities where basic living expenses are more expensive, the EITC is less effective at helping low-income families make ends meet in these cities (R Steet).

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