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Urge Congress to protect tax credits for working families

Urge Congress to protect tax credits for working families

Supporting American Workers

 

Late Tuesday night, Congressional leaders announced they had successfully negotiated a bipartisan tax package that will support United Way’s work in breaking down childhood poverty and building hope for families throughout our neighborhoods. The Protecting Americans from Tax Hikes (PATH) Act of 2015, while not perfect, saves the current version of the Earned Income Tax Credit and Child Tax Credit and represents a big win for working families.

Join us in urging Congress to save key provisions of the Earned Income Tax Credit and Child Tax Credit. The House will vote on the bipartisan tax package today; the Senate will vote on it tomorrow. Submit a letter to Congress using this simple form: Take Action Now >

The EITC and CTC are among our nation’s most effective pro-work and anti-poverty tools for low- and moderate-income working people that encourages work and offsets federal payroll and income taxes.

The EITC is well-targeted: for low-income workers, the credit rises with earnings until it reaches its maximum level (it then gradually phases out at higher income levels). The EITC is “refundable,” meaning that if a low-income household earns an amount of the credit that exceeds the household’s federal income tax liability, they can receive the balance as a tax refund.

The CTC helps working families offset the cost of raising children. It is worth up to $1,000 per eligible child (under age 17 at the end of the tax year). The CTC includes a refundable component. Working families can receive a refund equal to 15 percent of their earnings above $3,000, up to the credit’s full $1,000-per-child value.

These refundable working family tax credits allow parents to keep more of what they earn to pay for things like childcare, groceries, and car repairs so they can get to work. The stabilizing effect positively impacts children and families far beyond the time frame during which families claim the credits.

One of United Way’s key investments in the areas of financial-stability is the volunteer tax assistance program through Goodwill of Northern Illinois. Last tax season, nearly 2,400 families and individuals filed a federal and state tax return for free through the program, resulting in over $880,000 Earned Income Tax Credits, which represents over 35 percent of the total amount of tax returns to our community.

The number is even higher for residents in Ellis Heights and Midtown neighborhoods, sitting at 55 percent. For this upcoming tax season, in collaboration with Goodwill, United Way will make available the free tax assistance program at the Strong Neighborhoods for those neighborhoods.

If Congress lets current key provisions for EITC and CTC expire, many working families will suffer. For instance, without action, a single mother of two, working full-time at minimum wage will lose her entire child tax credit of $1,725 (more than one month’s pay).

Use the link below to submit a letter to Congress. After you do that, share this message with your family, friends and co-workers and encourage them to support one of the most effective tools we have to create and maintain financial stability in our communities.

 

Take Action Now >

 


 

Roman J. Salamon is Director of Communication and Marketing at United Way of Rock River Valley

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