Tax Credits for Working Families

TCWF Releases Four-Part Interview with Professor Kathryn Edin

January 27th, 2015

Before addressing policymakers, researchers and advocates at a January 30th Capitol Hill briefing, Professor Kathryn Edin sat down with Tax Credits for Working Families to discuss her upcoming book, It’s Not Like I’m Poor: How Working Families Make Ends Meet in a Post-Welfare World.

Edin, Distinguished Bloomberg Professor in the Department of Sociology at Johns Hopkins University, and her co-authors Sarah Halpern-Meekin, Laura Tach and Jennifer Sykes provide an on-the-ground, in depth look at how the American safety net benefits low-income workers and their families. The book draws on interviews with 115 lower-income families to determine how they make use of benefits like the EITC come tax time.

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News Round-Up: January 26, 2015

January 26th, 2015

Here are some highlights from the past week’s news 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 and/or state.

  • In his State of the Union address, President Obama unveiled a tax reform plan that includes expanding the Child and Dependent Care Tax Credit, increasing the Earned Income Tax Credit (EITC) for childless workers and making permanent key improvements to the EITC and Child Tax Credit scheduled to expire in 2017 (Washington PostColumbus DispatchAEIForbes). Although parts of the president’s plan are endorsed by conservatives like Representative Paul Ryan (R-Wis.) (CNS NewsThe Hill), others have argued that it discriminates against stay-at-home parents (New York TimesWashington PostNational Review).
  • This Friday, Tax Credits for Working Families and the Corporation for Enterprise Development (CFED) invite you to attend an EITC Awareness Day briefing on Capitol Hill. “It’s Not Like I’m Poor: New Research and Political Prospects for the Earned Income Tax Credit and Volunteer Income Tax Assistance” will answer important questions about the EITC, including how workers use it, the role played by Volunteer Income Tax Assistance (VITA) programs and the political prospects for these federal policies (Tax Credits for Working Families).

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News Round-up: January 20, 2015

January 20th, 2015

Here are some highlights from the past week’s news 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 and/or state.

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Tax Credits for Working Families are a Pillar of the President’s Latest Tax Plan

January 20th, 2015

By Lauren Pescatore

This weekend, President Obama unveiled a series of tax reforms that seek to reduce the burden our current tax code places on middle-class workers and their families. The plan would eliminate certain tax loopholes that are available only to wealthy individuals and large corporations while expanding and improving benefits for lower- to middle-income workers.

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Forty Years of the Earned Income Tax Credit: A Congressional Briefing on What’s Been Achieved and What Lies Ahead

January 15th, 2015

EITC Awareness Day – Friday, January 30, 2015; 9-11 a.m. EST

Russell Senate Office Building, Room 385

Washington, D.C.

 

Featuring Keynote Speakers:

  • Senator Sherrod Brown (D-OH)
  • Professor Kathryn Edin, Johns Hopkins University

Tax Credits for Working Families and the Corporation for Enterprise Development (CFED) invite you to attend an EITC Awareness Day briefing on Capitol Hill. It’s Not Like I’m Poor: New Research and Political Prospects for the Earned Income Tax Credit and Volunteer Income Tax Assistance will answer important questions about the EITC, including how workers use it, the role played by Volunteer Income Tax Assistance (VITA) programs and the political prospects for these federal policies. The briefing marks the 40th anniversary of the enactment of the EITC, now widely regarded as the nation’s most powerful anti-poverty program.

This event will bring leading researchers, policymakers, advocates and EITC recipients together to share their knowledge and first-hand experience with the EITC and to discuss the role VITA plays in ensuring all eligible workers receive the credit. Despite the EITC’s proven benefits, the credit goes unclaimed by one in five eligible workers.

Senator Sherrod Brown (D-OH), a longtime advocate for the EITC and VITA, will speak on the importance of these programs and their political prospects in the coming years. Kathryn Edin, Distinguished Bloomberg Professor in the Department of Sociology at Johns Hopkins University will present insights from her upcoming book, It’s Not Like I’m Poor, drawn from in-depth interviews with over 100 low-income families.

The keynote speakers will be followed by a panel discussion moderated by Greg Kaufman, editor of TalkPoverty.org, and will include Chye-Ching Huang, a Tax Policy Analyst with the Center on Budget and Policy Priorities (CBPP), as well as individuals with direct VITA volunteer and client experience.

A light breakfast will be served at 9 am and event activities will commence at 9:30 am. The event is free, but space is limited. Seating is on a first-come, first-served basis. RSVP by Monday, January 26

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News Round-up: January 12, 2015

January 12th, 2015

Here are some highlights from the past week’s news 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 and/or state.

  • Representative Chris Van Hollen (D-MD), the ranking Democrat on the House Budget Committee, unveiled a tax relief plan today that includes expanding tax credits that help cover the cost of child care and creating a “paycheck bonus credit” for working couples making less than $200,000 per year (Washington Examiner, Washington Post, The Hill).
  • Senator Sherrod Brown (D-OH) introduced legislation that would allow eligible workers to access a portion of their EITC in advance, as an alternative to more costly lending options (Center for American Progress, Cleveland.com).

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Senator Sherrod Brown Turns to EITC to Help Lower-Income Workers Avoid Costly Payday Loans

January 9th, 2015

By Lauren Pescatore

U.S. Senator Sherrod Brown (D-OH) outlined a new plan Wednesday that would allow eligible lower-income workers to access a portion of their Earned Income Tax Credit (EITC) in advance, as an alternative to more costly lending options. The “Early Refund EITC” would provide zero-interest short-term cash advances to workers – many of whom live paycheck to paycheck – to help cover the cost of monthly bills and promote financial stability throughout the year.

The EITC has typically been paid out as a lump sum at tax time. In order to receive the Early Refund EITC, workers would need to enroll in the program through their employers at mid-year and request an advance payment.

Allowing advanced access to a portion of the credit has been found to reduce financial stress among recipients, according to a pilot program currently underway in Chicago. Advance EITC payments would also help lower-income workers avoid turning to costly payday loans and other predatory lending options, which typically carry annual interest rates of 200-500 percent. The size of the Early Refund EITC would be capped at $500 and deducted from the lump sum received at tax time.

“Rewarding Americans for hard work and providing them greater opportunities should be a bipartisan goal,” Senator Brown said in a recent interview with Tax Credits for Working Families. “Improving the EITC ensures that Americans who work hard and take responsibility can take home more of their pay each month. As we continue our economic recovery, it’s vital that we pursue policies that promote work and provide ladders of opportunity to more Americans.”

For more information on Senator Brown’s Early Refund EITC plan, click here.

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News Round-up: January 5, 2015

January 5th, 2015

Here are some highlights from the past week’s news 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 and/or state.

  • Washington Governor Jay Inslee’s 2015 budget, which includes funding for the state’s Earned Income Tax Credit (EITC), is facing Republican opposition (Seattle Times).
  • Massachusetts Governor-elect Charlie Baker wrote that he will stay true to his campaign promise to explore expanding the state EITC and increasing the minimum wage (Mass Live).

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News Round-up: December 22, 2014

December 22nd, 2014

Here are some highlights from the past week’s news 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 and/or state.

  • The Senate passed the House-approved tax extenders package (Bloomberg, National Journal) that does not expand expiring Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) improvements. President Obama is calling for a tax reform package in the New Year that would expand the improvements (The Hill).

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Guest Post: Fighting Poverty at Tax Time through the EITC

December 17th, 2014

This post was written by Elizabeth Kneebone and Natalie Holmes of the Brookings Institution and originally appeared on their blog here. We are cross-posting with their permission.

With tax season around the corner, thousands of certified volunteer programs across the country are gearing up to offer free tax return preparation services to millions of low- and moderate-income taxpayers, military families, people with disabilities and seniors.

In addition to free tax assistance, many of these programs invest in outreach and education efforts to make sure residents in their community know about important tax provisions they may qualify for, including the Earned Income Tax Credit and the Additional Child Tax Credit. Both of these credits for low-income working families are refundable, meaning that if the credit exceeds the taxes owed, filers can receive the remainder as tax refunds. Together, these two provisions keep millions of workers and their families out of poverty each year.

The U.S. Census Bureau’s Supplemental Poverty Measure suggests that without the EITC and ACTC the nation’s poverty rate would have been 2.9 percentage points higher in 2013. The impact of these credits was even more pronounced for children: together the EITC and ACTC reduced the child poverty rate by 6.4 percentage points.

New state-level estimates show that every state shared in the anti-poverty effects of these credits, from the District of Columbia to Texas, where the credits lifted 1.2 million residents-including over half a million children-out of poverty. (For detailed state data, see this table.)

The key to maximizing the anti-poverty impact of these provisions-as well as the range of other positive effects associated with them-is to make sure eligible workers and their families claim the credits they qualify for at tax time.

As outreach efforts around these important policies and tax preparation services ramp up for this tax season, we’ve updated our profiles of the EITC-eligible population at the state and metro area level to help inform those efforts. With this information, organizations can not only get a sense of the size and makeup of the EITC-eligible population in their community, but they can also tailor their outreach strategies based on information about the types of industries and occupations that tend to employ these workers and the most common languages eligible filers tend to speak.

Visit our EITC Interactive and Resources page to find the full complement of the latest national, state, and metro area data on the EITC-eligible population.

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