IRS encourages people to apply for earned income tax credit, By Rachel McGrath, January 27, 2012, Ventura County Star: “The Internal Revenue Service is urging low- to middle-income earners in Ventura County to find out whether they qualify for a tax credit that could put thousands of dollars into their pockets. The earned income tax credit is intended to help those who work hard but don’t make much money, reporters were told Friday by Verlinda Paul of the IRS. An estimated one in five workers nationwide fail to claim the credit. One of the main reasons Americans don’t apply for the credit is because they don’t know about it, Paul said. The director of the earned income tax credit for the IRS, she spoke to reporters in a conference call. Ironically, many who might be eligible earn so little that they are not required to file a tax return and yet in order to claim the credit, a tax return must be filed and the credit applied for…”

Quinn signs earned-income tax credit, By Sophia Tareen (AP), January 10, 2012, Springfield State Journal-Register: “Legislation aimed at helping poor Illinois families keep more of what they earn was signed into law Tuesday, a month after Gov. Pat Quinn signed companion legislation granting tax breaks and incentives aimed at keeping two big employers in the state. The new law, which is effective for the 2012 tax year, expands the state’s earned-income tax credit. It’s now 5 percent of the federal credit and will climb to 7.5 percent next year and 10 percent the year after. State officials said it would eventually translate to an average of about $100 a year per family. Currently about 900,000 families meet income guidelines in Illinois, but some advocates estimated 1 million will qualify this year…”

Wisconsin one of few states that will raise taxes on poor, By Michael Louis Vinson, December 28, 2011, Appleton Post-Crescent: “As Wisconsinites await W-2 forms and related tax documents, hundreds of thousands of low-income families are bracing for a state budget change that will mean less money in their wallets next year. Last summer, the state Legislature reduced the amount of money low- income families can receive in tax credits by $56.2 million. That places Wisconsin among only a handful of states that will effectively raise taxes on their poorest residents in 2012, according to a recent study by the Center on Budget and Policy Priorities, a nonprofit think tank…”

• Malloy touts new tax credit, By JC Reindl, November 23, 2011, The Day: “Gov. Dannel P. Malloy on Tuesday joined Democratic lawmakers and social services advocates to herald the implementation of Connecticut’s new Earned Income Tax Credit for low- and moderate-income individuals and families. The credit was included in the governor’s biennial budget plan that passed the General Assembly this spring. The cost to the state is a projected $110 million this fiscal year. Twenty-five states and the District of Columbia now offer some type of earned income tax credit. Under Connecticut’s program, the approximately 190,000 state households that are eligible for the federal Earned Income Tax Credit will receive an additional credit equal to 30 percent of the federal one…”
• Taxing the working poor back to starting line, Editorial, November 20, 2011, Detroit Free Press: “As much as younger pensioners may howl about the state income taxes they’ll have to pay come Jan. 1, the hardest hit group of people who file income tax forms may be the poorest — workers whose wages barely bring their families up to the poverty level. That’s because the state’s Earned Income Tax Credit will drop from 20% of the federal payment to 6%. Although this is better than nothing — which, in fact, was what Michigan had until three years ago — it will return the state to the unwelcome status of taxing some people back into poverty…”

Tax credits and rural incomes, By Ron Durst and Tracey Farrigan, May 19, 2011, Daily Yonder: “Since 1980, the total cost of tax expenditures has increased by over 250 percent and currently exceeds $1.1 trillion. A primary reason for this growth is that there is greater bipartisan support to enact tax expenditures than to fund or increase direct spending programs, especially since tax expenditures are often viewed as tax cuts. These expenditures have significantly reduced the share of taxpayers who owe Federal income tax. As a result, in 2009, only about half of rural taxpayers owed any Federal income tax. This is slightly below the overall rate of 53 percent of all taxpayers and reflects the lower income levels of rural taxpayers. In 2008, 22 percent of rural taxpayers received a cash payment from one or more of the refundable tax credits. The average amount was $2,428. Thus, an effect of the increased use of the tax code for social policy goals has been an increase in the number of rural taxpayers who owe no Federal income tax and who receive a cash payment as a result of the refundable tax credits…”

New version of Snyder tax plan saves Earned Income Tax Credit for working poor, By Dawson Bell, May 10, 2011, Detroit Free Press: “Michigan’s working poor would continue to receive supplemental income from the Earned Income Tax Credit - albeit at a significantly reduced level - under the latest revision to Gov. Rick Snyder’s proposed business and income tax overhaul plan. The credit, currently set at 20% of the federal EITC, would be reduced to 6%, under a proposal announced by Lt. Gov. Brian Calley this morning during a Senate committee hearing on the overhaul. That would mean about $108 million in relief to low-income wage earners in 2012, down from a projected $360 million under current law…”

State approves tax credit for working poor, By Stephen Singer (AP), May 5, 2011, Stamford Advocate: “Connecticut’s new earned income tax credit will provide needed financial help to as many as 190,000 low-income workers, supporters say. Critics dismiss it as welfare. The tax credit, part of the $40 billion, two-year budget signed Wednesday by Gov. Dannel P. Malloy, is a major victory for the Democratic governor and Democrats who run the Legislature after being blocked for years by then-Gov. M. Jodi Rell, Malloy’s Republican predecessor. Sen. Martin Looney, the Democrats’ leader in the state Senate, called it an economic stimulus for low-income workers…”

• Snyder agrees to $25 per child tax credit, By Paul Egan, April 20, 2011, Detroit News: “The Snyder administration has agreed to a House lawmaker’s proposal that would restore part of the Earned Income Tax Credit, Lt. Gov. Brian Calley said today. Calley said Gov. Rick Snyder is prepared to support a proposal from Rep. Jud Gilbert, R-Algonac, that would give a tax credit of $25 per child for families that would have been eligible for the EITC. Snyder’s Feb. 17 budget proposed eliminating the state version of the credit, which is equal to 20 percent of the federal credit for the working poor. Adding the $25-per-child credit is expected to cost about $20 million, Calley said. He said changes Snyder made to his proposal for the Homestead Property Tax Credit give another $80 million in relief to low-income earners. Eliminating the EITC is expected to save the state about $340 million. Families that received the credit received an average of $432 last year…”
• Gov. Rick Snyder agrees to restore part of Earned Income Tax Credit, By Dawson Bell, April 20, 2011, Detroit Free Press: “A new change agreed to in Gov. Rick Snyder’s plan to overhaul Michigan’s tax code would restore a portion of the Earned Income Tax Credit for the working poor, administration and legislative officials said today. The administration has agreed to give EITC-eligible income tax filers a $25/child credit, Lt. Gov. Brian Calley said in testimony before the House Tax Policy Committee. Coupled with changes to Snyder’s original proposal announced last week that more narrowly target the Homestead Tax Credit to low-income filers, the revised proposal would provide about $100 million in payments to the working poor…”

Building wealth in rural America, By Ray Lopez, April 19, 2011, Daily Yonder: “Residents of rural communities face different challenges than their urban counterparts when they try to build assets or take steps to achieve financial security. The reasons are many and familiar. Rural communities have seen their share of economic struggles in recent years. Nearly one in six people living in rural America fell below the poverty line in 2009, according to U.S. Census data. Of the nearly 3 million Texas residents who were classified as rural by the U.S. Department of Agriculture’s Economic Research Service, 19.5 percent were below the poverty line. That is 3 percentage points higher than in urban Texas. Unemployment and educational attainment levels were also worse in rural Texas than in urban Texas…”

In some states, working poor could pay more taxes, By Pam Fessler, April 11, 2011, National Public Radio: “Several states want to scale back or eliminate a tax credit for the working poor, as they try to balance their budgets. Anti-poverty groups say some of these same states also want to cut taxes for businesses. Governors say they’re trying to balance the need to promote jobs with deficit reduction. But advocates say the poor are being asked to bear an unfair share of the burden. The tax break is called an earned income tax credit, or EITC. About half the states offer residents an EITC on top of a similar credit available from the federal government…”

States weigh cuts to earned income tax credit for working poor, By Pamela M. Prah, March 28, 2011, Stateline.org: “Rohnalda Hollon, a single mother of three in Beaverton, Michigan, and an Iraq war veteran, worries that state budget cutbacks will wipe out the refund she gets from a program aimed at helping the working poor. ‘The $400 from the Earned Income Tax Credit could mean the difference between paying my Consumer’s Energy bill or not,’ says Hollon, who works full-time for the Army National Guard Military Funeral Honors program, and has been put forward as one of the faces of an advocacy campaign called Save Michigan’s Earned Income Tax Credit. Hollan is typical of the recipients of the Michigan credit, which returns an average of $432 to families, most with children. Governor Rick Snyder wants to eliminate the program, along with a slew of other tax credits, in a bid to make the state tax system ’simple, fair and efficient.’ Eliminating the credits also would help close the state’s $1.8 billion budget deficit. Just scrapping the Earned Income Tax Credit, or EITC, would save the state at least $340 million a year…”

• Walker’s budget slashes tax credits that aid poor, By Dee J. Hall, March 6, 2011, Wisconsin State Journal: “Low-income taxpayers in Wisconsin would lose hundreds of dollars in tax credits a year under Gov. Scott Walker’s proposed budget - at the same time the governor wants tax cuts for businesses and investors to boost jobs. Walker proposes cutting about $16 million a year from the program, which in 2009 paid 273,939 low-income Wisconsin residents a total of $133 million. Under Walker’s proposed biennial budget, a single mother with two children earning about minimum wage - $15,000 a year - would lose $302 of her $704 Earned Income Tax Credit next year, according to estimates from the nonpartisan Wisconsin Taxpayers Alliance. A two-parent household with two children earning $30,000 a year would see its tax credit cut by $194 to $258, the alliance said…”
• Bill seeks to cut EITC percentage, By Matthew Clark, March 11, 2011, Pittsburg Morning Sun: “A bill spearheaded by a Kansas House committee has been proposed to decrease Kansas’ Earned Income Tax Credit (EITC) from its current 18 percent to 5 percent over the next four years. State Rep. Terry Calloway, a Pittsburg Republican, introduced the measure to the House Taxation Committee and it has already drawn sharp attacks from Democrats and other opponents who call the measure ‘counter-productive.’ The bill will generate an additional $56.3 million to the state’s General Fund initially in fiscal year 2012 and increase to $64.5 million by fiscal year 2016. It will reduce the amount of the tax credit - which is meant to benefit low-income individuals and families and also takes out a provision making the tax credit refundable. That means, if a family’s tax credit was higher than their tax liability, they would have the liability paid off, but would not get a check for the difference…”

Tax credit helps poor, but many unaware, By Rita Price, February 25, 2011, Columbus Dispatch: “As a single mother who works and goes to college, Brandi Hardgrow adheres to a budget that leaves little room for wiggle - or for unexpected car repairs. But she gets by, and a big reason is her tax savvy. Hardgrow, 29, files for the Earned Income Tax Credit and then carefully manages a hefty refund - sometimes more than $2,500 - that keeps her household humming when her job as a Columbus-schools latchkey worker pauses for summer break. ‘It’s made a total difference in my life,’ she said. Researchers say the EITC is the nation’s best poverty buffer for low-income workers. It’s also an economic boon for their communities because recipients often need to spend a big chunk of their refunds right away…”

Bill would eliminate state tax credit for working poor, By Karen Bouffard, February 8, 2011, Detroit News: “Tax credits for Michigan’s working poor would be eliminated under a bill introduced in the state Senate today. The bill to repeal the state earned income tax credit (EITC) was met with strong opposition by Democrats and family advocates, who said it would amount to a tax increase for low income workers. The bill was introduced by Sen. Roger Kahn, R-Saginaw, who said Michigan can’t afford the $370 million cost. If the bill passes in the Senate and House, and is signed into law by Gov. Rick Snyder, the credit would be eliminated at the end of this calendar year…”

Free money left on table, By Armand Emamdjomeh, April 29, 2010, New York Times: “What if residents of California - a state reeling from unemployment, a sagging economy and a gaping budget hole - had access to more than $1 billion, but did not use it? What if Alameda County residents had access to $29 million and failed to take it out of the federal treasury? That is exactly what they have been doing, according to a new report, ‘Left on the Table,’ by two professors at California State University, Fresno, which was published by the New America Foundation. An estimated 800,000 California residents will fail to claim a total of $1.2 billion in 2009 earned-income tax credit refunds, the report says. California has the highest rate of unclaimed earned-income tax credits nationally, with nearly a quarter of qualified residents failing to claim the credit when they file their taxes, according to studies by both the Internal Revenue Service and the Government Accountability Office…”

Earned-income credit boosts Michigan’s low-income workers, By Brian J. O’Connor, February 16, 2010, Detroit News: “Michiganians struggling to just get by in this dismal economy are getting a helping hand from an unlikely source: the tax man. Federal and state tax agencies have anywhere from a few hundred to several thousand dollars to give low-income workers and their families through the Earned Income Tax Credit. Last year, more than 720,000 Michigan residents collected $1.5 billion from the federal credit, at an average of $2,047 apiece. More than 40 percent of those getting the credit lived in Wayne, Oakland or Macomb counties. Michigan gave out $145 million under the first year of its own state credit, which matched 10 percent of the federal cash, and this year the state is set to match 20 percent of the federal amount…”

Tax break may grow for working poor, By Peter Wong, February 14, 2010, Salem Statesman Journal: “An expansion of a tax break for poor working families won support from Portland to Medford - and Woodburn. The expanded break, in the form of an earned-income tax credit, no longer would benefit Ian Finch of Portland or state Rep. Betty Komp of Woodburn. But both qualified for the federal credit, which is subtracted directly from taxes owed - and they said an expanded state credit would help thousands of families. Finch used the credit while, as a single father of five children, he was working and going to school - even though he said he could have drawn more from welfare payments. ‘Increasing the state earned-income tax credit will help other families who work really hard to break the cycle of poverty,’ Finch told the Senate Finance and Revenue Committee last week. ‘This is also an opportunity for the state of Oregon to send the message to these hard-working families that they are valued and that the state recognizes all their hard work…’”

IRS expands Earned Income Tax Credit for 2009, January 29, 2010, Milwaukee Journal Sentinel: “There’s a bright spot in the nation’s dismal economic climate this tax season: The Internal Revenue Service has expanded the Earned Income Tax Credit for 2009, meaning more families are eligible for a larger return from the federal government. The EITC now includes low-income working families with three or more children, and the top income limit has increased to $48,279 from $41,646 in 2008. Changes also have been made to the definition of a qualifying child. The IRS estimates more than 5 million additional families will be eligible for the expanded credit this year. The EITC gave back $50 billion to 24 million taxpayers across the country in 2008, said David Williams, director of electronic tax administration and refundable credits for the IRS. ‘EITC is one of the largest and most effective anti-poverty programs in government. It lifted millions of people out of poverty last year,’ Williams said…”

Tough economy could spark surge in tax refund loans, By Tony Pugh, January 24, 2010, Miami Herald: “After several years of declining use, tax refund anticipation loans could make a big comeback this tax season with poor, cash-strapped taxpayers. Known as ‘RALs,’ refund anticipation loans are bank loans secured by the amount of a person’s expected income tax refund. Once a tax return is filed electronically by a commercial tax preparer, a third-party bank can provide the loan to the taxpayer in the amount of the expected refund. Various costs, fees and finance charges are deducted from the check, which usually arrives in three to five days - or within a few hours for an extra fee of $25 to $39. In turn, the IRS sends the taxpayer’s actual refund check to the bank to pay off the loan. The combination of widespread money woes, a sour economy and fatter tax refund checks for poor families could entice more people into taking the quickie loans, which have been one of the most pilloried financial products ever marketed…”

Tax refund loans cost Arkansans millions, By John Lyon, November 3, 2009, Fort Smith Times Record: “Arkansans spend about $100 million a year obtaining loans against anticipated tax refunds, according to a report released Monday by Arkansas Advocates for Children and Families. The report also estimated that Arkansans miss out on as much as $110 million a year by failing to claim the federal earned income tax credit. ‘Low-income tax filers are paying tax preparation fees, in many cases exorbitant tax preparation fees to have their taxes done, when in fact most low-income families could receive free tax assistance through an existing VITA (Volunteer Income Tax Assistance) site,’ Rich Huddleston, executive director of Arkansas Advocates, said at a news conference to announce the report…”

Obama would keep $85 billion in tax breaks for working poor, By Lori Montgomery, September 3, 2009, Washington Post: “President Obama is proposing to add more than $85 billion to the nation’s budget deficits over the next decade to extend two tax breaks for the working poor, a move critics on Wednesday blasted as a violation of Obama’s pledge to pay for new policies. The tax breaks were included in the economic stimulus package Obama signed soon after taking office in January, and are scheduled to expire in 2011. But last week, in its midyear update of the federal budget, the White House said it plans to extend the tax cuts through 2019 without covering the cost by cutting spending or raising taxes elsewhere. The reason? Technically, the stimulus amended a series of sweeping tax cuts enacted in 2001 during the Bush administration. Obama has repeatedly said he does not expect Congress to cover the enormous cost of maintaining the Bush tax cuts past their 2010 expiration date. And because the stimulus provisions are now part of the Bush tax cuts, Congress shouldn’t have to pay for them, either, White House budget documents say…”