The United Way network is a vast and diverse collection of local and state United Ways. Some United Ways are staffed completely by volunteers, and raise less than $1 million, annually. Some United Ways employ upwards of 200 non-profit professionals and can fundraise tens of millions per year. There is not a one-size-fits-all approach to United Way, each of these entities is hyper-local and representative of the communities they serve.
So, what would bring close to 90 United Way executives to Capitol Hill? What common issue could affect 90 different communities, in 41 states? The Earned Income Tax Credit (EITC).
The EITC is a federal refundable tax credit, available to individuals and families that earn less than $55,000. Recipients must work to be eligible, and the purpose of the credit is to offset federal payroll and income taxes so that low-income hardworking Americans can keep more of what they’ve earned. Recipients use their boost in income for things like reliable transportation to work, groceries, or childcare. Additionally, the EITC is a work-incentive, as the more a reception earns, the more credit they receive.
The EITC is incredibly effective at helping working families keep their heads above water, but workers under 25 or those that can’t claim dependents aren’t eligible for the EITC or receive too small a credit to experience stabilizing affects. It should be noted that workers that can’t claim dependents are often non-custodial parents, that still contribute to the needs of raising a child. Under current law, a childless adult or noncustodial parent working full-time, year-round at the federal minimum wage is ineligible for the EITC. As a result, low-wage workers not raising children are the sole group that the federal tax system taxes into or deeper into poverty.
Congress can fix this hole, by lowering the age of eligibility and expanding the size of the credit for workers not claiming dependents. And that’s what our new United Way executive are on the Hill talking to their elected officials about today. They’re asking that EITC be expanded in the next appropriate legislative vehicle.
You can help amplify the message these advocates are taking to the Hill, by taking action here.