Tax Credits for Working Families

News Round-Up: March 24, 2015

March 24th, 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.

  • According to the Center on Budget and Policy Priorities, safety net programs like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) lifted 39 million Americans out of poverty in 2013 (Off the Charts).
  • New data showed that 55 percent of EITC recipients paid for tax preparation last year instead of having their taxes prepared for free at Volunteer Income Tax Assistance (VITA) sites (ABC News).

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State EITC Campaigns Off to a Promising Start

March 20th, 2015

By Kate Skochdopole

As the debate around income inequality heats up at the federal level, state legislative sessions are in full swing – and packed full of proposals aimed at tackling the wealth gap.  We’ve got our eye on a number of states looking to expand their existing Earned Income Tax Credits (EITCs) or enact new ones to help working families keep more of the money they’ve earned: 

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News Round-Up: March 16, 2015

March 16th, 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.

  • Shikha Dalmia wrote about Sen. Marco Rubio’s (R-Fla.) and Sen. Mike Lee’s (R-Utah) new tax plan, arguing that it would benefit high-income families and corporations more than middle- and low-class families (The Week). In response, Ramesh Ponnuru stood by his previous assessment of the bill, claiming that the legislation would be good for all taxpayers (National Review).
  • The Corporation for Enterprise Development (CFED) released a new breakdown of IRS data on tax returns prepared at Volunteer Income Tax Assistance (VITA) sites. The data showed volunteer tax preparers helped return nearly $4 billion to low-income taxpayers across the nation, more than one billion of which was in the form of an Earned Income Tax Credit (EITC)  (Columbus Dispatch, Reno News Gazette, The Day).

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News Round-Up: March 9, 2015

March 9th, 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.

  • Congressional Democrats proposed a package of tax cuts to provide relief for middle class families and challenged Republicans to join them in the effort. The package would expand existing tax credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) as well as create new ones. (The Hill, Tax Credits for Working Families, Huffington Post, MSN).
  • Meanwhile, Senators Marco Rubio (R-Fla.) and Mike Lee (R-Utah) introduced a tax reform framework that would condense the current seven tax brackets down to two, lower corporate tax rates and eliminate many existing individual deductions (Reuters, Washington Post). Although many came out in favor of the reforms (Tax Foundation), some voiced concern that the provisions would mainly benefit high-income families and that the plan overall could increase the national debt (Forbes, Center on Budget and Policy Priorities, National Journal).

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Congressional Democrats “Challenge” Republicans to Partner in Cutting Taxes for Working Families

March 5th, 2015

By Kate Skochdopole 

This week, Congressional Democrats proposed a package of tax cuts to provide relief for middle class families and challenged Republicans to join them in the effort. The package, put forth by Sens. Richard Durbin (Ill.), Charles Schumer (N.Y.), Jack Reed (RI) and Patty Murray (Wash.), would improve existing tax credits for working families as well as create new ones.

The proposals include:

  • The Working Families Tax Relief Act, which would make permanent improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) scheduled to expire in 2017, expand the EITC for childless workers and index the CTC to inflation.
  • The 21st Century Workers Tax Cut Act, which would introduce a new tax credit for two-earner families with children. The credit would cover expenses that stack up when both parents work such as the increased cost of childcare and transportation. The bill also would reduce a family’s earned income for the purposes of calculating the EITC.
  • The Helping Working Families Afford Child Care Act, which would increase the value of the Child and Dependent Care Credit to reflect the rising cost of childcare.

Meanwhile, Senators Marco Rubio (R-Fla.) and Mike Lee (R-Utah) introduced a tax reform framework yesterday that would condense the current seven tax brackets down to two, lower corporate tax rates and eliminate many existing individual deductions. The plan notably excludes any protection for the EITC and other vital tax credits for workers. Even though the plan features an increased Child Tax Credit, experts argue that the increased credit would largely benefit higher-income families rather than those with modest wages. Sen. Rubio, who is expected to announce his candidacy for president in the coming weeks, said these reforms would guide his tax plan if elected.

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News Round-Up: March 2, 2015

March 2nd, 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.

  • The Annie E. Casey Foundation released its latest KIDS COUNT data snapshot, “Measuring Access to Opportunity in the United States.” The report points to the Supplemental Poverty Measure as a more accurate assessment of the poverty rate and the effect of safety net programs like the Earned Income Tax Credit (EITC) than the federal government’s official poverty measure. (Annie E. Casey Foundation, Huffington Post, Bennington Banner).
  • We announced that we will be participating in “Telling Taxpayer Stories,” a virtual training webinar on the importance of storytelling in raising awareness around Volunteer Income Tax Assistance (VITA) (Tax Credits for Working Families). You can sign up for the webinar here.

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Join us for “Telling Taxpayer Stories” – a virtual training and Q&A

February 26th, 2015

For low-income workers at tax time, Volunteer Income Tax Assistance (VITA) sites can mean the difference between a tax return that offers a financial boost and one that provides little if any help at all. VITA sites provide free tax preparation services, raising awareness within communities about eligibility for the Earned Income Tax Credit (EITC) and other tax benefits and ensuring that these credits are collected by tax filers.

Unfortunately, the critical role VITA sites play in communities across the nation is not widely understood. On March 3, Tax Credits for Working Families and the Corporation for Enterprise Development (CFED) will present a webinar on the importance of sharing client stories to help protect and expand VITA services.  Telling Taxpayer Stories, hosted by CFED’s newly-launched Taxpayer Opportunity Network, will provide a virtual training on how to tell compelling stories about the importance of these programs for lower-income workers and attract media attention as VITA Awareness Day approaches on March 10.

Telling Taxpayer Stories

Tuesday, March 3, 2015 | 2-3 PM EST

 Register here

This virtual training is free, but advanced registration is required.

 

 

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News Round-Up: February 23, 2015

February 23rd, 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.

  • New research from the Political Economy Research Institute at the University of Massachusetts Amherst further proves that the Earned Income Tax Credit (EITC) is linked to improved public health (Political Economy Research Institute).
  • Erica Williams and Michael Leachman of the Center on Budget and Policy Priorities (CBPP) wrote that states looking to strengthen the economy should turn to the EITC (Center on Budget and Policy Priorities).
  • Vermont daycare operators called for an expansion of the state’s Child Care Credit (VT Digger).

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News Round-Up: February 17, 2015

February 17th, 2015

Putting Advance EITC Payments to the Test

February 12th, 2015

By Kate Skochdopole

Administering the EITC in quarterly payments throughout the year – rather than as a lump sum at tax time – significantly reduces financial stress among recipients, according to preliminary findings from a new pilot program.

Chicago’s EITC Periodic Payment Pilot Project is now midway through an evaluation of how advance EITC payments may help workers make ends meet throughout the year. The project is a collaborative effort between the Center for Economic Progress (CEP), the Chicago Department of Family and Support Services, the Office of Chicago Mayor Rahm Emanuel, the Chicago Housing Authority and the University of Illinois at Urbana-Champaign.

The 18-month pilot program administers quarterly EITC payments to 343 families and compares their experience to those of 164 families receiving a standard EITC payment at tax time. The study analyzes both the administrative feasibility and the impact of the two options and can help guide policy decisions around advance EITC payments.

U.S. Senator Sherrod Brown (D-OH) recently unveiled a plan to allow eligible lower-income workers to access a portion of their EITC in advance, as an alternative to more costly lending options. The Chicago pilot’s interim report indicates that such a plan could not only benefit workers and their families but is also easy to implement:

  • Because quarterly payments must be calculated in advance, concerns have centered on the difficulty of predicting the amount of an individual’s EITC using their previous year’s tax return. But the study shows the vast majority of EITC recipients receive comparable payments each year, making it feasible to accurately predict who should receive the credit and for how much.
  • Another concern was that sending EITC payments four times per year might require more work and expense for administrators. But because all participants provided bank account information, dispersal of the quarterly payments was uncomplicated and inexpensive.
  • Participants reported feeling less stressed about their financial situation when receiving quarterly payments. When asked to evaluate their stress level around feeding their family, 72 percent of participants receiving quarterly payments reported feeling less stressed versus 33 percent of the control group. Additionally, 39 percent of the quarterly participants reported increased savings versus only 22 percent of those who received lump-sum payments.
  • The results also indicate that the participants themselves prefer the quarterly payments method.   Fully 86 percent of participants said they would take part in the program if it was offered again and only three of 343 participants opted out of the program during the year.

The full report is expected this June. For more information on the Periodic EITC Payment Pilot Project, contact Dylan Bellisle, EITC Pilot Program Manager at CEP, at dbellisle@economicprogress.org.

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