When soldiers return home from deployment, filing their taxes is usually the last thing on their mind. But for one military family in Nevada, it was the first stop they made after the 'homecoming.' The veteran, his expectant wife, and their two young children came to the United Way of Northern Nevada and the Sierra's free tax preparation service with the dread of an overdue tax bill. The family found out they'd actually be getting a substantial refund because of the Earned Income Tax Credit, and Child Tax Credit--and not only would it help fulfill financial obligations, it would also allow them to focus on reuniting as a family rather than worrying about making ends meet.
United Way witnesses firsthand the tremendous impact of the EITC and CTC through the more than 380 network affiliates around the country that help low to moderate income workers access the credits through Volunteer Income Tax Assistance (VITA) sites and MyFreeTaxes.com. In 2015, United Way-supported VITA efforts completed nearly two million returns leading to $2.35 Billion coming back to communities, including more than $681 million in EITC. But beyond the numbers, United Ways see the faces of the people, the military and veteran families all over the country, who are brought into stability through the EITC and CTC.
Congressional leaders should be commended for crafting a bipartisan package that will save the working family credits. The Protecting Americans from Tax Hikes (PATH) Act of 2015, while not perfect, is a strong step forward for working Americans and will make it easier for struggling families to achieve financial stability and to pay for things like child care, reliable transportation to work, or household groceries. Congress should stand for these working families and save key provisions of the EITC and CTC by supporting the PATH Act.
These working family tax credits are among our nation's most effective pro-work tools, putting children and families on a path to success and independence. The EITC and CTC allow parents to keep more of what they earn, which helps children and families far beyond the timeframe during which families claim the credits. Studies show that the EITC improves child health and academic achievement, increasing the likelihood of college attendance and success in adulthood. Additionally, these tax credits bring money back into communities which is spent at local businesses, boosting economic activity. It's no wonder that every President over the last 40 years has expanded the EITC with bipartisan support.
Without Congressional action pushing the tax bill over the finish line, 50 million Americans could lose all or part of the credits in 2017. One million military and veteran families will be impacted and 16 million Americans in working families are expected to fall into poverty, or tumble in deeper. As a real example, a single mom with two kids, working full time at the federal minimum wage would lose her entire child tax credit of $1,725--the equivalent of more than one month's wages.
If key provisions of the EITC and CTC are left to expire, the impact to working Americans will be immense. The Earned Income Tax Credit and Child Tax credit have a history of bipartisan support, fighting poverty and incentivizing work.
Congress should seize the opportunity to stand for working families by voting yes on the bipartisan tax deal.