Tax Credits for Working Families

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.

Kate Skochdopole Posted in Earned Income Tax Credit, Federal, Recent Updates | No Comments »

New Case Studies Offer Insight into Effective EITC Advocacy

December 16th, 2014

Over the last several years, advocates have worked hard to protect and expand current state Earned Income Tax Credits (EITCs) or to create new ones. To assist with these efforts, Tax Credits for Working Families has released our latest series of case studies of recent EITC campaigns, as well as a resource guide to summarize and help advocates interpret our findings.

The latest studies include Maryland and Washington D.C., where legislators expanded the state EITC shortly after increasing the minimum wage and Ohio, where advocates succeeded in doubling the value of the EITC from 5 to 10 percent, though the credit still remains nonrefundable.

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Lauren Pescatore Posted in Recent Updates | No Comments »

News Round-Up: December 15, 2014

December 15th, 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 is still reviewing the tax extenders package approved by the House last week. This plan does not include an expansion of expiring Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) improvements (Nonprofit Quarterly, Marketwatch, Wall Street Journal).
  • The IRS inspector general recently reported a significant amount of CTC overpayment (Politico, ABC News). Bob Greenstein of the Center on Budget and Policy Priorities wrote that most overpayments result from unintentional errors rather than fraud and warned that cuts to the IRS budget could weaken its ability to reduce improper EITC and CTC payments (Huffington Post, Center on Budget and Policy Priorities).

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Kate Skochdopole Posted in Recent Updates, Weekly News Round-Up | No Comments »

News Round-Up: December 8, 2014

December 8th, 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 House passed a tax-extenders package that does not include key Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) improvements scheduled to expire in 2017. The Senate will review the legislation later this week (Washington Post, New York Times, National Journal, Vox).

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Lauren Pescatore Posted in Recent Updates, Weekly News Round-Up | Comments Off

Key Tax Credit Legislation is Pending in Congress

December 4th, 2014

By Kate Skochdopole

As Congressional debate continues about whether to extend key Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) provisions in the latest package of tax breaks, several bills are pending in Congress that aim to improve the two credits.

Democrats and Republicans alike – including President Obama and Rep. Paul Ryan (R-WI) – have proposed expanding the EITC for childless workers, but the legislation has stalled in Congress.

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Lauren Pescatore Posted in Recent Updates | Comments Off

News Round-Up: December 1, 2014

December 1st, 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.

Statement from TCWF on Latest Tax Extenders Deal

November 26th, 2014

Following Congressional compromise on a recent package of tax breaks that does not include extending key improvements to the Earned Income Tax Credit and Child Tax Credit, Tax Credits for Working Families Director Lauren Pescatore released the following statement:

“By not extending key improvements to the Earned Income Tax Credit and Child Tax Credit, lawmakers are prioritizing tax breaks for corporations over support for lower-income working families. These two credits enjoy bipartisan support, and historically have served as an area of consensus between both parties even during times of heated debate. We have received word that this deal is being re-negotiated, and remain optimistic that Congress will choose to protect working families and their children as they address changes to the tax code.”

For additional comment from Tax Credits for Working Families, please contact Lauren Pescatore at lpescatore@thehatchergroup.com or (301) 656-0348.

For Tax Credits for Working Families’ latest infographic on the importance of making key EITC and CTC improvements permanent, click here.

Lauren Pescatore Posted in Recent Updates | Comments Off

News Round-Up: November 24, 2014

November 24th, 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.

Meet Ollisha

November 17th, 2014

OllishaOllisha Jones is a single working mother living in New Jersey with her four-year old daughter. In addition to her full-time job as a parent, Ollisha works as a contractor and takes communications classes at her local community college.

Although New Jersey is one of the top five wealthiest states in the nation, it requires employers to pay a minimum wage of just $8.25 an hour. Between the high cost of living in an area nestled between Philadelphia and New York City, and the cost of providing for her daughter without receiving child support, Ollisha barely earns enough to make ends meet.

That’s why she collects the federal Child Tax Credit (CTC).

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Lauren Pescatore Posted in Child Tax Credit, Recent Updates | Comments Off

Weekly News Round-Up: November 17, 2014

November 17th, 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 Center on Budget and Policy Priorities’ analysis of Census data found that nearly 50 million Americans, including 31 million children, would lose all or part of their Child Tax Credit (CTC) or Earned Income Tax Credit (EITC) if Congress allows certain key provisions to expire in 2017. More than 16 million people would fall into – or deeper into – poverty if the provisions expire. (Center on Budget and Policy Priorities, The Huffington Post, The Hill)

  • We shared the story of single working mother Ollisha Jones, who collects the CTC to help pay for college courses, transportation to and from work, and provide for her four-year old daughter. Ollisha is one of many who could potentially lose the credit if no action is taken to make permanent the expiring provisions. (Tax Credits for Working Families)

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    Lauren Pescatore Posted in Recent Updates | Comments Off

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