Tax Credits for Workers and Families

This has been a big year for state action on tax credits that support low-and moderate-income workers and families. And this makes sense given the bad hand low- and middle-income families were dealt under the recent Trump-GOP tax law, which provides most of its benefits to high-income households and wealthy investors.   Many proposed changes are part of states’ broader reaction to the impact of the new federal law on state tax systems. Unfortunately, some of those proposals left much to be desired.

Most states piggyback on federal law to some extent for their own taxes, especially personal and corporate income taxes. These states in particular must understand what the federal changes mean for their own tax codes and decide whether to remain “coupled” to changes in the tax bill, decouple from them or take other action in response.

The annual poverty data released by the Census Bureau today continues to show that federal refundable tax credits are the second most important anti-poverty program after Social Security. But this could change if the House Republicans have their way. The budget resolution approved by Republicans on the House Budget Committee in July would place new […]

A couple weeks ago, a billionaire set the Internet ablaze when on 60 Minutes Australia he chided millennials to stop buying avocado toast and fancy coffee if they wanted to buy a home. The backlash was swift and deserved. Twenty- and early thirty-something people rightly took offense to the suggestion that they haven’t purchased homes […]

Two states are on the verge of embracing a tried and tested anti-poverty policy, the Earned Income Tax Credit (EITC). In the past two weeks, lawmakers in both Hawaii and Montana passed EITC legislation, which governors in both states are expected to sign. Once officially enacted, these states will join 26 other states and the […]

See the 2016 Updated Brief Here Read the brief in a PDF here.  that time, the EITC has been improved to lift and keep more working families out of poverty. The most recent improvements enhanced the credit for families with three or more children and for married couples. First enacted temporarily as part of the […]