Earned Income Tax Credit

  • Detroiters leave $80 million unclaimed for tax credit, By Susan Tompor, January 29, 2017, Detroit Free Press: “The Earned Income Tax Credit is one big bonus check for Michigan’s struggling workforce. The credit is a one-time shot of potentially thousands of dollars that can be used to pay bills, put money down on a used car or even, maybe, save a little something for a rainy day or retirement.  It’s sort of like those big profit-sharing checks for many autoworkers that are ranging from $5,000 at Fiat Chrysler Automobiles to $9,000 on average at Ford.  But you must file a tax return to get that tax-credit cash. And plenty of people don’t file for one reason or another…”
  • Gov. Scott Walker to expand low-income tax credit he once cut, By Jason Stein and Patrick Marley, February 1, 2017, Milwaukee Journal Sentinel: “Gov. Scott Walker is reversing course on a key tax credit for the working poor, proposing to raise incomes for more than 130,000 state families by returning the more than $20 million a year he cut from the program in 2011.  The Republican governor will unveil the proposal at the Wauwatosa Rotary Club Wednesday as part of a broader package in his budget bill that aims to strengthen families and marriage. The measure marks the changing priorities for Walker as he shifts from the budget cuts of his first term to his current goal of trying to draw Wisconsinites into the work force…”

Low-Income Tax Refunds

IRS to delay tax refunds for millions of low-income families, January 11, 2017, Chicago Tribune: “The IRS is delaying tax refunds for more than 40 million low-income families this year as the agency steps up efforts to fight identity theft and fraud.  The delays will affect families claiming the earned income tax credit and the additional child tax credit. These tax breaks are geared to benefit the working poor, and many families claim both…”

Earned Income Tax Credit – California

From Sacramento to Fontana, new anti-poverty tax credit has paid out, By Jim Miller, July 28, 2016, Sacramento Bee: “California’s new earned-income tax credit had put about $189 million in the pockets of the working poor as of earlier this month, well below the $380 million in claims the Brown administration and lawmakers had expected.  Proponents, though, consider the program’s first year a success, and new data from the Franchise Tax Board show that taxpayers from around the state have claimed the credit…”

Low-Income Families and Taxes

  • For nontraditional families, the tax code can be especially confusing, By Yuki Noguchi, April 7, 2016, National Public Radio: “The TV and a cellphone are playing videos, as Trevor Franklin tries to quiet a brood of kids in the living room of the apartment he shares with his fiancée in southeast Washington, D.C. ‘TJ is mine, and Malik and Morgan are my stepkids,’ Franklin says. A 14-year-old stepdaughter is on her way home from school, and his pregnant fiancée is on bed rest with a fifth child. The Census Bureau says about 41 percent of children are born to mothers who aren’t married, about five times the rate in the 1940s. But they aren’t all single parents. A growing percentage of babies born out of wedlock have parents who live together…”
  • Philadelphia wants low-income residents to take tax credit, By Katie Colaneri, March 30, 2016, Marketplace: “Even before Tax Day,  Philadelphia resident Roslyn Sanders is ahead of the game. She’s at her local community development corporation getting her taxes done and it’s the second time she’s come here. Sanders is back because last year, the organization helped her and her husband, Donald get a big refund by figuring out they qualified for the Earned Income Tax Credit, or EITC. She said they got a check in the mail for more than $3,000…”
  • Editorial: Tax code should work for all low-income Americans, Editorial, April 5, 2016, Des Moines Register: “Conservatives have never met a tax cut they didn’t like. Liberals have never met a government handout they didn’t support. So Republicans and Democrats in U.S. Congress should be able to unite behind President Barack Obama’s proposal to expand the Earned Income Tax Credit. The EITC, created in 1975, is intended to provide additional dollars to low-income Americans and promote employment. To qualify, people must meet income and other requirements, as well as file a tax return. The credit increases as an individual’s income increases, thereby encouraging people to enter the workforce or work more. Because it is refundable, it puts money directly into people’s pockets to spend…”

Earned Income Tax Credit

Working poor bank on tax break in costly California, By Erica E. Phillips, April 6, 2015, Nasdaq.com: “For 30 years, Modesto Alejandro Vasquez has supported his family of four by working as a janitor in a downtown office building here. In 2014, he made about $30,000. Earning 25% above the federal poverty level in costly Southern California, Mr. Vasquez looks forward to this time of year, when a tax refund puts extra cash in his pocket. He said he used the money–$6,000 this year–to pay off debts and repair a computer for his daughter.  A large portion of the refund came via the federal Earned Income Tax Credit. The EITC is intended to aid the working poor by reducing the amount of taxes owed, or in many cases, like Mr. Vasquez’s, by providing a refund, based on a taxpayer’s income and number of dependents.  California lawmakers, responding to the state’s nation-leading poverty level, are considering the creation of a state EITC program…”

Earned Income Tax Credit – Massachusetts

Wide support for lifting earned-income credit, By Katie Johnson, March 4, 2015, Boston Globe: “Quanda Burrell, a single mother of two, works full time as a day-care teacher, earns $24,000 a year, and juggles the bills that inevitably pile up in her Boston home. But each year around this time, she says, she is able to ‘clear the slate,’ paying her debts with an income tax refund bolstered by an $800 state credit.  Burrell, 29, is among more than 400,000 low-income workers in Massachusetts who would benefit from a proposed increase in the state’s Earned Income Tax Credit, widely viewed as one of most effective antipoverty programs and supported by lawmakers and policy makers across the political spectrum…”

Earned Income Tax Credit

Childless adults qualify for earned income credit, too, By Susan Tompor, February 4, 2015, Detroit Free Press: “The Earned Income Tax Credit has one of those clunky names that you might ignore, as unfortunately some do. But the complex credit can put real money into the pockets of working people. Each year, the Internal Revenue Service, volunteer tax preparers, and others roll out a National EITC Awareness Day to warn that much-needed money is being left on the table. After years of such publicity and with almost 28 million people receiving $66 billion for the credit last year, it is hard to believe that anyone would not know about a key tool that fights poverty…”

EITC and Poverty Measurement

Everyone’s favorite anti-poverty program doesn’t reduce the poverty rate, By Dylan Matthews, July 29, 2014, Vox: “As we mentioned during the rollout of Paul Ryan’s poverty plan last week, expanding the Earned Income Tax Credit is one of the few anti-poverty measures both parties can agree about (even if they can’t come to an agreement on how to fund it). But at the same time, the EITC does exactly nothing to reduce the official poverty rate. The reason has nothing to do with the effectiveness of the policy — the best evidence we have is that the EITC improves health, school achievement in children of recipient households, and those children’s wages once they grow up, among other things. It has to do entirely with what is and isn’t included in the official poverty numbers. . .”

Earned Income Tax Credit

  • Obama budget would expand low-income tax break, By Jackie Calmes, March 3, 2014, New York Times: “When President Obama releases his proposed annual budget on Tuesday, he will grab his best opportunity of the year to show, in one comprehensive package of hard numbers and precise detail, how he would have the government address what he has called ‘the defining challenge of our time’ — economic inequality. Many of Mr. Obama’s perennial proposals on education, job training, research and more have hit a Republican wall in Congress, but this year the president is adding one with echoes of Republicans’ own ideas. He will propose expanding a longstanding tax break to better benefit workers who are childless, which the White House estimates will help 13.5 million additional Americans who hold jobs yet remain poor. The current tax break favors low-wage workers with children…”
  • Obama budget urges expanding earned income tax credit, By Aamer Madhani, March 3, 2014, USA Today: “President Obama’s 2015 budget to be unveiled on Tuesday will include a proposal to expand the earned-income tax credit for 13.5 million low-income Americans by closing tax loopholes benefiting certain fund managers and high-income, self-employed workers. Under Obama’s proposal, 7.7 million workers would be eligible for a larger credit and 5.8 million workers would be made newly eligible for the credit…”

Earned Income Tax Credit

A renewed push for Earned Income Tax Credit in states, By Jake Grovum, February 11, 2014, Stateline: “A push to boost tax credits for the working poor could see success in states this year, echoing a key proposal from the White House. In the opening days of 2014 legislative sessions, bills that would expand or create the Earned Income Tax Credit have been introduced in nine states, according to the National Conference of State Legislatures. Four of those states are looking to create new state versions of the credit. These moves would build off the federal credit of the same name that President Barack Obama proposed to expand in his State of the Union speech last month. Governors on both sides of the aisle have also backed the idea, thanks in part to newly flush budgets and an eye toward aiding their economies by boosting workers’ incomes…”

Earned Income Tax Credit

America’s most effective anti-poverty program is also its most overlooked, By Amber Phillips, February 4, 2014, Salt Lake Tribune: “Most people dread filing their taxes. But for Denver resident Corrine Fowler, it turned out to be a lifesaver back in 1997. Around Christmas, the then-22-year-old single mom lost both her jobs as an administrative clerk and hostess while putting herself through school. She had little money for the new year. But when Fowler filed her taxes, she learned that she qualified for the Earned Income Tax Credit, an often overlooked federal program that gives tax refunds to lower-income workers. The $1,800 check she received helped her pay her rent until March, when she had landed a job as a bank teller…”

Minimum Wage

Dwindling tools to raise wages, By Eduardo Porter, December 10, 2013, New York Times: “Senator Ted Kennedy once called the minimum wage ‘one of the best’ tools for fighting poverty. But the fact is, the minimum wage’s anti-poverty powers have been declining steadily for decades. In the late 1960s, a full-time job at minimum wage could almost lift a family of four above the poverty line. By the late ’80s, it left them 40 percent below it. That is about where things stand today…”

Low-Wage Workers and Public Assistance Programs

  • Fast-food workers cost taxpayers nearly $7 billion in welfare costs, By David Migoya, October 15, 2013, Denver Post: “Fast-food workers cost taxpayers nearly $7 billion in welfare costs each year, according to a study issued Tuesday by the University of California at Berkeley. That’s because the workers at restaurants such as Wendy’s and McDonald’s are forced onto the public dole from wages that are too low for them to get by, the study found. The study found that about 52 percent of fast-food workers receive some form of public assistance, compared with 25 percent of the general workforce. A similar study was also issued by the National Employment Law project…”
  • Public assistance for fast-food workers costs taxpayers, reports say, By Diane Stafford, October 15, 2013, Kansas City Star: “Low-paying jobs in the fast-food industry exact a multibillion-dollar cost on U.S. taxpayers, according to two national reports released Tuesday. U.S. taxpayers pay about $7 billion a year to support Medicaid, food stamps and other public assistance programs for fast-food workers who earn poverty-level wages, a team of university researchers said in one of the reports…”

Earned Income Tax Credit – Michigan

Michigan Dems: Restore low-income tax break, By Alanna Durkin (AP), March 3, 2013, Lansing State Journal: “Lansing taxi driver and single father Terry Beasley uses the federal and state earned-income tax credit to supplement the $12,000 he brings home every year, pay off bills and buy new clothes for his son. ‘It’s going to mean I’m going to have a whole lot less money and be a lot poorer,’ he said. About 800,000 low-income Michigan families, who qualify for the state’s earned income tax credit like Beasley, will bring home less money this year due to a reduction in the state’s earned-income tax credit to 6 percent from 20 percent of the similar federal credit, part of sweeping tax changes Republican Gov. Rick Snyder signed in 2011…”

Earned Income Tax Credit – North Carolina

Low-income taxpayers could lose N.C. credit, By John Frank, February 15, 2013, Charlotte Observer: “Lawmakers appear unwilling to extend a tax break for low-income workers, in what critics are calling the third strike against the state’s least fortunate in the first 10 days of the legislative session. More than 900,000 low- and moderate-income taxpayers received the modest tax break last year under the state’s earned income tax credit or EITC. The state credit was established in 2007, but it is scheduled to expire at the end of 2013 unless legislators act to extend it…”

Earned Income Tax Credit – Connecticut

New state tax credit for working poor paid $601 on average, By Mara Lee, January 10, 2013, Hartford Courant: “About 13 percent of Connecticut households worked either so little, or at such low-wage work in 2011 that they were eligible for the new state Earned Income Tax Credit. The average filer’s income was $17,957, according to an analysis released Thursday by the fiscal policy center at Connecticut Voices for Children, an anti-poverty nonprofit. The state helps the working poor by paying them 30 percent of what they can claim on the federal EITC. So the average household gets $2,003 in the federal income tax credit, and $601 from Connecticut…”

Earned Income Tax Credit – Pennsylvania

Dismay as Corbett ends funding for tax-credit program for low-income families, By Alfred Lubrano, August 15, 2012, Philadelphia Inquirer: “The Corbett administration has stopped funding a program that helped low-income working people get federal tax credits that kept them out of poverty. The program, administered by the Department of Public Welfare for just over $500,000, also helped pay for low-income workers to have their taxes prepared free, which saves people at or below the poverty line hundreds of dollars, advocates say. The cut echoes growing concerns among Republicans in Congress about the federal Earned Income Tax Credit (EITC) and other similar measures, seen as too much government in a time of financial crisis. That would be a reversal of decades of bipartisan support for the tax credit, once called ‘the best antipoverty program in America’ by President Ronald Reagan…”

Earned Income Tax Credit – Michigan

Michigan League for Human Services says Saginaw workers will lose most with reduced Earned Income Tax Credit, By Kathryn Lynch-Morin, May 14, 2012, Saginaw News: “Working families in Michigan could see a tax increase from the reduced Earned Income Tax Credit , and Saginaw workers could be hit the hardest, according to the Michigan League for Human Services. A report released Monday by the organization estimates working families in Michigan will see their taxes increase by as much as $244 million in 2013 as the state’s Earned Income Tax Credit is reduced from 20 percent to 6 percent…”

Earned Income Tax Credit

Antipoverty tax program offers relief, though often temporary, By Sabrina Tavernise, April 17, 2012, New York Times: “Karen Spain spent several long months before receiving her tax refund this year in a state of suspended panic. The rent was three months late. Her car’s brakes were shot. And she could no longer afford to pay her electricity bill. So when the refund finally arrived – a $7,200 cash infusion that was about a third of what she earned all last year as an assistant manager at an auto parts store – it brought a certain measure of relief, both financial and psychological. That did not last long. ‘Did we celebrate?’ said Ms. Spain, a 49-year-old mother of two. ‘No. We maintain, that’s all we do. We are just trying to keep our heads above water.’ It is tax time, the season when the country’s largest antipoverty program, the earned income tax credit, plows billions of dollars into mailboxes and bank accounts of low-income working Americans like Ms. Spain…”

Earned Income Tax Credit – Wisconsin, Iowa

  • Increased scrutiny of tax credits could mean more audits for Wisconsin’s poor, By Dee J. Hall, April 12, 2012, Wisconsin State Journal: “As Tax Day approaches, some low-income taxpayers in Wisconsin will notice smaller refunds – and increased scrutiny on claimed tax credits – because of changes in state law and a new effort by the Wisconsin Department of Revenue to ferret out fraud. Wisconsin is the first state chosen under a federal push to detect mistakes and fraud in the earned income tax credit program, Revenue spokeswoman Stephanie Marquis said. The credit, available from both the state and federal governments, is designed to provide relief to low-wage taxpayers and to encourage work by allowing them to claim refunds, even if they have paid little or no income taxes. This year, Wisconsin cut the amount of credit available to such taxpayers by $27.3 million to $113.3 million. The Legislature reduced the projected credit for next year by $28.9 million to $119.5 million…”
  • Branstad would sign earned income tax credit to get property tax deal, By Jason Clayworth and Donnelle Eller, April 5, 2012, Des Moines Register: “A long legislative freeze that has stalled progress on commercial property tax reform in Iowa showed signs Thursday of a political thaw. Gov. Terry Branstad said he would be willing to expand a tax break for Iowa’s poorest working families if he can get an agreement with Democrats to cut commercial and industrial property taxes. And just minutes later, Senate Majority Leader Michael Gronstal said his party wouldn’t insist that the breaks known as earned income tax credits be signed into law before negotiating on the property tax side of the give and take. Branstad twice last year vetoed the tax breaks for working families, frustrating members of both parties. Sen. Joe Bolkcom, a key Democrat involved in the debate, stood on the Senate floor Jan. 31 and vowed that no commercial property tax cut would happen without the governor’s signature on a bill to increase tax breaks for working families…”