Weekly Round-Up: May 17, 2013
May 17th, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- The Iowa House and Senate agreed this week upon a tax plan that would double the state’s Earned Income Tax Credit (EITC) from 7% to 14% of the federal credit in tax year 2013, and increase the credit to 15% in 2014. The bill, which the governor has indicated he will sign, also includes more than $10 of tax cuts for business, draining state revenues, for every dollar of EITC increase. In the last two years, the legislature passed an EITC three times only to see the governor veto it each time; the hard work and persistence of Iowa advocates finally paid off and helped make this bill better than it might otherwise have been. (The Quad City Times, The Des Moines Register)
- Last week, the Missouri House passed a bill that had already been passed by the Senate to end the renters’ portion of the state’s “Circuit Breaker” Property Tax Credit. This Tuesday, however, Gov. Nixon vetoed the bill, contending that it “does not constitute comprehensive tax credit reform,” so the credit for renters will be preserved. (The St. Louis Beacon)
Tags: Iowa, Maine, Maryland, Michigan, Missouri, New York, North Carolina, Wisconsin
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Weekly Round-Up: May 10, 2013
May 10th, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- The Colorado legislature passed a bill to enact a permanent state Earned Income Tax Credit (EITC) at 10 percent of the federal credit and a Child Tax Credit based on a percentage of income this week and now it only awaits approval from Gov. Hickenlooper, who is expected to sign the bill into law. The Colorado law has a provision that other states may wish to consider: the EITC is not to be counted as income when deciding if someone is eligible for public assistance, medical assistance, or any other publicly funded benefit. (The Coloradoan)
- Vermont Gov. Shumlin and legislative leaders this week agreed on a budget deal for 2014 that does not include any additional tax increases and will leave the state’s EITC untouched. The governor had originally proposed cutting the credit by $17 million to fund child care subsidies. (Seven Days, VTDigger.org, Bloomberg Businessweek)
Tags: Colorado, Minnesota, Missouri, New Jersey, North Carolina, Oregon, vermont
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Weekly Round-Up: May 3, 2013
May 3rd, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- The Vermont Senate approved a tax bill Wednesday that doesn’t include the $12 million cut to the state’s Earned Income Tax Credit (EITC) being pushed by Gov. Shumlin, and instead reduces some exemptions for high-income earners. The House and Senate will have to come to an agreement soon for the passage of any tax package before the state’s legislative session ends on May 11; since the House also refused to reduce the EITC, the credit should not be part of any negotiations, but Gov. Shumlin may continue to press for it. (Burlington Free Press, Vermont Today)
- A bill to enact a permanent state EITC and Child Tax Credit in Colorado passed with amendments in the House State Affairs Committee Monday and now moves on to the House Finance Committee. The EITC credit was amended so that the credit could only be claimed if the state revenues exceed the amount in its Taxpayers Bill of Rights, (not expected until 2015 at the earliest) and the Child Tax Credit was amended so that it can only be claimed if both a federal law and a Colorado law are enacted that allow the state to collect taxes from online retailers. The Senate has already passed the bill without these conditions. (The Denver Post 1,2)
- Nan Madden from the Minnesota Budget Project noted that the Minnesota House omnibus tax bill passed last week makes the tax system fairer, in part because it would increase the state’s Property Tax Refund for homeowners by $157 million and for renters by $15.5 million in 2015. The bill would also update Minnesota’s EITC, called the Working Family Credit, to reflect recent federal changes affecting married couples. (Minnesota Budget Project)
- Zach Schiller, research director at Policy Matters Ohio, testified to the House Ways & Means Committee on tax reform this week, commenting that the creation of a state EITC would benefit 800,000 working families in Ohio and make the state’s tax system fairer. (Policy Matters Ohio)
- The Michigan League for Public Policy highlighted the story of Paula Fekken, a low-income working mother of four who is feeling the sticker shock from tax changes made in Michigan in 2011, when the Legislature and Gov. Rick Snyder reduced the state EITC from 20 percent to 6 percent of the federal credit. The change means she won’t be able to repair her aging car that she needs for work. (Michigan League for Public Policy)
- Democratic Senators Dick Durbin and Sherrod Brown recently introduced legislation to make permanent the 2009 improvements to the Earned Income Tax Credit (EITC) and the Child Tax Credit, and expand eligibility for both credits. The bill would make the EITC more accessible to families without children, and reduce the age a taxpayer becomes eligible to 21. Senator Max Baucus, who chairs the Senate Finance committee, has signed on to the bill, which may indicate how he will treat these credits in any tax reform bill the committee develops. The bill is supported by over 300 national organizations. (The Hill, Office of Senator Brian Schatz)
- First Focus highlighted recent articles and research showing how the EITC can mean the difference between scraping by and falling short for millions of American families, and how it helps keep millions of American children out of poverty. (First Focus)
Tags: Colorado, Michigan, Minnesota, Ohio, vermont
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Weekly Round-Up: April 26, 2013
April 26th, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- Vermont Gov. Shumlin’s administration cut back its child care initiative this week to require $12 million in new funds instead of $17 million, but the plan would still reduce the state’s Earned Income Tax Credit (EITC). The Senate Health and Welfare Committee has recommended leaving the EITC intact. And advocates for the credit are speaking out, arguing that if the money to fund child care subsidies must come from a state program, the EITC should not be it. (The Burlington Free Press, Public Assets Institute, VTDigger.org)
- Mike Tramontina, President of ISED Ventures, which coordinates Iowa’s volunteer tax assistance programs, and Jackie Lynn Coleman, Executive Director at the National Community Tax Coalition wrote to The Gazette in support of an Iowa Senate-approved bill to increase the state’s EITC from 7 to 20 percent of the federal credit. The House and Gov. Branstad must now approve the bill. (The Gazette)
Tags: vermont
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New Focus on Tax Reform in the Senate
April 25th, 2013
By Lauren Pescatore
The discussion of tax reform was rejuvenated this week following an announcement from retiring Senate Finance Committee Chairman Max Baucus (D-Mont.) that he will use the time not spent campaigning for re-election to instead focus on an overhaul of the nation’s tax code. While he did not release additional details on his proposed framework for tax reform, he recently wrote a joint op-ed with Rep. Camp, in which they stated that their agreement on tax reform includes three principles, one of which is to “ensure that low-income and middle-income Americans will pay no more taxes than they do under current law.” Whether they can stick to this assurance and still comply with their other principles, which require lowering taxes for businesses, is not clear.
A look back into the chairman’s prior voting history also provides some insight as to how such an overhaul might affect working family tax credits.
Lauren Pescatore Posted in Child and Dependent Care Tax Credit, Child Tax Credit, Earned Income Tax Credit, Recent Updates | Comments Off
Weekly Round-Up: April 19, 2013
April 19th, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- A bill to create a state Earned Income Tax Credit (EITC) at 10 percent of the federal credit and a Child Tax Credit worth $100 for each qualifying child under 6 won approval in the Colorado Senate Wednesday, and is now headed to the House. (MSN Money, The Republic)
- Michigan House Democrats marked “Tax Day” this week with plans to introduce legislation that would require employers to provide their employees with information about the state’s EITC, as well as legislation to increase the credit to 11 percent of the federal EITC and restore a $600 per child tax credit. (MLive.com, WKAR Radio)
Tags: Colorado, louisiana, Michigan, New Jersey, Oklahoma, vermont
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How Tax Credits for Working Families Would Fare Under the President’s Proposed Budget
April 15th, 2013
By Lauren Pescatore
Our analysis of President Barack Obama’s budget for 2014 released last week illustrates how challenging it can be to raise tax revenues substantially while protecting low- to middle-income families from tax increases. While certain tax provisions could negatively affect these families, the $3.78 trillion budget primarily targets the wealthy by closing tax loopholes and limiting deductions, and includes permanent improvements to working family tax credits and an increase in funding for community tax assistance in an attempt to mitigate any additional tax burden on low- to middle-income households.
The President’s offer includes a proposal to move from the current Consumer Price Index (CPI) to a “chained CPI.” We blogged about what this switch would mean for tax credits for working families back in December, when a chained CPI was being considered as part of fiscal cliff negotiations.
Lauren Pescatore Posted in Child Tax Credit, Earned Income Tax Credit, Federal, Recent Updates | Comments Off
Weekly Round-Up: April 12, 2013
April 12th, 2013
Here are some highlights from this week’s news on family tax credit issues. Remember – you can also track news coverage throughout the week by visiting our RSS feed, where you can filter news by a specific credit and/or state.
- Members of the Maine Legislature’s Taxation Committee voted this week against a provision of Gov. Paul LePage’s proposed state budget that would have barred anyone younger than 65 from taking advantage of the state’s property tax circuit breaker, called the Residents Property Tax and Rent Refund. The committee is now preparing recommendations for the Appropriations Committee for alternate ways to balance the budget. (The Maine Sun Journal, Bangor Daily News)
- The Minnesota House Property and Local Tax Division passed its Division Report this week, which would increase the state’s Renters’ Credit by $15.5 million and the Property Tax Refund (known as the Circuit Breaker) for homeowners by $157 million in FY 2015. It would also include funding for outreach to the one-third of eligible tax payers that don’t claim the Circuit Breaker. The Division Report now will go to the House Tax Committee for incorporation into the omnibus tax bill. (Twin Cities Daily Planet, Minnesota Budget Bites)
Tags: Iowa, Maine, Michigan, Minnesota, North Carolina, Ohio, vermont
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Going to court for consumers
April 10th, 2013
Guest commentary by Sean Noble, Director of Public Policy & Research at the National Community Tax Coalition. Tax Credits for Working Families is posting this blog because paid preparers handle two-thirds of the tax filings that claim the EITC and other working family tax credits, so improving the quality of their work would protect millions of working families against erroneous tax filings.
(A version of this commentary also appears on WorkForward, the blog of the National Community Tax Coalition.)
Retaining basic, common-sense regulations of commercial tax preparers is critical to protecting consumers from fraud, abuse, and incompetence, we’ve reiterated in court papers filed last week.
The National Community Tax Coalition (NCTC) joined the National Consumer Law Center in filing an amicus curiae (“friend of the court”) brief on April 5 in the U.S. Court of Appeals for the District of Columbia Circuit. Our move comes in support of the IRS attempts to reinstate paid-preparer rules recently struck-down by a lower court decision.
Lauren Pescatore Posted in Family Tax Preparation and Filing, Recent Updates | Comments Off
Making the Federal Extensions Permanent
April 9th, 2013
The bill to resolve the “fiscal cliff” that Congress passed at the beginning of the year made the Bush-era tax credit extensions permanent, but only extended the 2009 expansions to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) for five years. Now legislation is being introduced in the House and Senate to make these provisions permanent as well.
In the House, Rep. Rosa DeLauro (D-CT) has introduced the Child Tax Credit Permanency Act of 2013, H.R. 769, which has 116 cosponsors. This bill would make permanent the lower threshold for receiving the CTC and also make permanent the indexing to inflation.
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