Original Source: The News Leader
By Cynthia Pritchard, United Way of Greater Augusta
Did you know tax credits can help families struggling to make ends meet?
The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are among the nation’s strongest tools to promote work and help families keep more of what they earn to pay for things like child care, groceries and car repairs so they can get to work. These important refundable tax credits give working families a hand up, not a hand out.
These critical tax credits let families keep more of what they earn so that they can make ends meet. Only people who work are eligible for the EITC and CTC, which allow 727,000 working moms and dads in Virginia to keep what they earn. Those working tax credits help farm workers, home health aides, teaching assistants and more in Virginia. Research finds that during the 1990s EITC expansion actually did more to raise employment among single mothers than welfare reform.
The United Way of Greater Augusta partners with Community Action Partnership’s Volunteer Income Tax Assistance program to provide free tax assistance to Staunton, Augusta, Waynesboro residents each year, and the volunteers and staff members see first-hand just how important these tax credits are for working families who are struggling to stretch their dollars and pay for the basics like food and gas.
Even so, essential parts of the EITC and CTC will expire in 2017 if Congress doesn’t act. Congress has an important chance when considering tax legislation this year to prevent the clock from running out on these provisions that make the EITC and CTC more effective and help the credits reach more working families.
We cannot afford to go backward. If Congress fails to save expiring EITC and CTC provisions, more than 4,300 Greater Augusta region households will fall deeper into poverty. Impacting almost 20,000 individuals in our community.
The EITC & CTC programs put money back into local communities, helping to support local economies and employers. EITC and CTC earners take the income returned to them and spend it at businesses in their communities, paying for work supports like a down payment on a more reliable car or stocking their pantry to feed their children. In 2012, the EITC brought back $1.4 billion to main streets across Virginia. That could mean about $10 million to $14 million in our region back to businesses in our community.
The U.S. House of Representatives is already considering legislation that would make permanent some expiring tax provisions with no mention of doing the same for the EITC and CTC provisions that help hardworking low-income families or childless workers struggling to get by. It is up to Virginia’s lawmakers in the U.S. House and Senate to ensure that the final legislation under consideration includes permanent extensions of the expiring EITC and CTC provisions.
If Congress lets key provisions expire at the end of 2017:
•284,000 Virginia families will lose part or all of their credits
•Many married couples would face higher marriage penalties and cuts to their EITC.
•Families with more than two children would face an EITC cut.
•Many low-income working parents would lose their entire Child Tax Credit. For example, a single mother with two children working full-time at the federal minimum wage would lose her entire Child Tax Credit of $1,725 (greater than one month’s pay).
•Virginia would lose $247 million, directly impacting the pockets of workers and businesses
Cynthia Pritchard is president and CEO of United Way of Greater Augusta.