Tax Credits for Working Families

News Round-up: June 27, 2016

June 27th, 2016

  • TOP STORY: Rhode Island Governor Gina Raimondo signed into law an expansion of the state’s Earned Income Tax Credit (EITC), increasing the credit from 12.5 to 15 percent of the federal credit. (TCWF, The Providence Journal)

Rhode Island EITC Increase Signed Into Law

June 24th, 2016

Earlier today, Rhode Island Governor Gina Raimondo signed off on a new $8.9-billion budget for the state, which included an increase in the state’s Earned Income Tax Credit (EITC) from 12.5 to 15 percent of the federal credit. 

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New Report Lifts Up EITC as Effective Way to Keep Kids out of Poverty

June 24th, 2016

By Kyle Parrott

This week, a new report lifted up the Earned Income Tax Credit (EITC) as one of the most dependable tools for improving the health of American children and keeping them out of poverty.

The KIDS COUNT Data Book, a report released annually by the Annie E. Casey Foundation, ranks all 50 states in several areas of child well-being and provides a snapshot of how lawmakers at the state and federal level are working to lower the child poverty rate.

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News Round-up: June 20, 2016

June 20th, 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.

  • The California Department of Finance announced that only half of the funds set aside for the state’s Earned Income Tax Credit (EITC) program were collected during tax season, meaning that thousands of families across the state who are eligible for the credit failed to claim it on their tax returns. Lawmakers have set aside an extra $2 million in the state budget to fund outreach campaigns and raise awareness of the credit, which was created in 2015 to help offset income inequality across the state (Sacramento Bee).

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Guest Blog: Supporting Fathers through the Earned Income Tax Credit

June 17th, 2016

This post was written by Natalie Holmes, a research analyst with the Metropolitan Policy Program at the Brookings Institution.

The Earned Income Tax Credit (EITC) is often discussed in terms of its effects on single mothers. Father’s Day provides a good reminder that millions of low-income working dads–and their children–also benefit from the EITC.

Using Brookings’ MetroTax model, we estimate that 9.7 million working dads and their 17.9 million children were eligible to receive the EITC in 2014. Among these fathers, over half (57 percent) were projected to file joint returns, and the remaining 43 percent as heads of household. We also estimate that 3.8 million single male filers without qualifying children were EITC-eligible in the same year.

Although the majority of EITC-eligible fathers file joint tax returns, single dads are more likely than married dads to be EITC-eligible: We estimate that three in five single dads were potentially eligible to receive the EITC in 2014, compared to just over one in five married fathers, and one in eight single male filers without qualifying children.

Perhaps counterintuitively, this last group is not necessarily childless. A child can only be the “qualifying child” of one tax filer. Consequently, noncustodial parents, even those who provide support for their children, may not be able to claim them as qualifying children for the EITC.

This matters because the difference between the maximum credit for filers with qualifying children and those without is significant. Whereas the maximum credit for workers with three or more children will be nearly $6,300 in tax year 2016, it is just $506 for workers without qualifying children.

Recognition of the fact that “childless” filers may in fact be noncustodial parents is part of the rationale for bipartisan proposals to double the size of the EITC for workers without qualifying children. Millions of low-income working fathers and their children already benefit from the EITC each year; according to our analysis, doubling the credit for workers without qualifying children would benefit 14.4 million tax filers, increasing their average credit by $360.

To learn more about the EITC-eligible population, visit Brookings’ EITC data interactive.

Kate Skochdopole Posted in Recent Updates, Uncategorized | Comments Off on Guest Blog: Supporting Fathers through the Earned Income Tax Credit

Tax Credits Notably Absent from Presidential Campaign Policy Plans

June 16th, 2016

By Kate Skochdopole

The Earned Income Tax Credit (EITC) is one of the most discussed and widely supported policies in Congress. So why do the two presumptive presidential nominees have little or nothing to say about the EITC or similar tax credits?

So far, Donald J. Trump (R) and former Secretary of State and Sen. Hillary Clinton (D) have not announced specific policy positions on any tax credits for working families. Although as a senator, Clinton voted in favor of the EITC and has hinted that she would support expansions of the Child and Dependent Care Tax Credit (CDCTC), she has yet to announce concrete plans for how she would use the tax code to help working families make ends meet. Trump’s tax plan makes no mention of tax credits like the EITC, CDCTC or Child Tax Credit (CTC).

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News Round-up: June 13, 2016

June 13th, 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.

  • Sen. Sherrod Brown (D-Ohio) introduced legislation to expand the Earned Income Tax Credit (EITC) for childless workers and lower the eligibility age from 25 to 21. Brown also reiterated his support for allowing low-income families to receive a portion of their EITC in advance payments (Politico, The Hill).
  • House Republicans this week unveiled their vision for federal safety net programs and lifted up the Earned Income Tax Credit (EITC) as one of the most effective ways to lower the poverty rate and increase opportunity for low-income families. But some of the report’s suggestions for reforming other antipoverty programs like food stamps and Social Security drew criticism from Democrats (TCWF, Washington Post, Washington Post 2, USA Today, AEI).

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Republican Anti-Poverty Plan Shows EITC Continues to Be Middle Ground for a Divided Congress

June 8th, 2016

By Kyle Parrott and Kate Skochdopole

House Republicans this week unveiled their vision for federal safety net programs and lifted up the Earned Income Tax Credit (EITC) as one of the most effective ways to lower the poverty rate and increase opportunity for low-income families. But the report received criticism for its lack of concrete policy proposals and for its support of strict work requirements that may cause individuals to be pushed further down the economic ladder.

The Task Force on Poverty, Opportunity, & Upward Mobility, led by House Speaker Paul Ryan (R-Wis.), released it’s “A Better Way” plan Monday evening. The report hinted that House Republicans might support legislation to increase the current EITC and expand the credit for childless workers.

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News Round-up: June 6, 2016

June 6th, 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.

  • House Republicans this week are expected to announce their plans to combat poverty and present the findings of an anti-poverty taskforce. Ahead of that release, Rep. Sandy Levin (D-Mich.) wrote an opinion piece encouraging Congress to continue efforts to help working families make ends meet while investing in programs such as the Earned Income Tax Credit (EITC) that have a proven record of supporting low-income households (Washington Post).

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Rep. Mike Coffman Calls for an Expanded EITC to Help Childless Workers “Realize Their Dreams”

June 2nd, 2016

By Lauren Pescatore

Several weeks ago, U.S. Representative Mike Coffman (R-CO) joined the ranks of policymakers on both sides of the aisle with plans to expand the Earned Income Tax Credit (EITC) for workers without dependent children. Rep. Coffman’s Enhancing Advancement, Reducing Noncompliance and Improving Trust (EARN IT) Act would increase the maximum EITC for filers without dependent children and lower the eligibility age from 25 to 21.

“The EITC is very valuable for workers with families,” Rep. Coffman said in a recent interview with Tax Credits for Working Families. “My bill recognizes those who are left out under current EITC rules […] These young, single, childless workers are often the people just getting started in life, and this might be just the boost they need to enter the work force, really begin to build up their personal prosperity and begin to realize their dreams – like saving for a house, or getting married, or repaying debt.”

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