By Carissa Woytach, United Way of Greater Cleveland Staff Writer
United Way of Greater Cleveland, alongside others in an initiative sparked by United Way Worldwide, is advocating for the federal Earned Income Tax Credit (EITC) expansion in this year’s Congressional tax reform debate.
In a letter to the editor published in The Plain Dealer, United Way President and CEO August Napoli applauded Sen. Sherrod Brown’s support to expand EITC to include childless workers and taxpayers ages 21-24.
In place since 1975, the federal EITC was made permanent last year, prompting organizations like United Way to lobby for its expansion. Currently, the federal EITC provides a refundable tax credit dependent on recipients’ income, marital status and number of children. The working poor with multiple children benefit the most. According to the Center on Budget and Policy Priorities (CBPP), the average EITC refund for families with children for 2015 was $3,186 — effectively boosting wages by $265 a month.
“It’s a proven tool to reduce poverty and for keeping people out of poverty. For working families who benefit from EITC, studies show it helps make ends meet to buy necessities like food and gas, pay a medical bill or make car repairs.”
EITC income eligibility starts between $39,300 and $53,500 depending on the filer’s marital status and number of dependent children. Working poor with no children, whose income is below $14,900 alone or $20,400 for a married couple can receive a very small credit if over the age of 24. The tax credit phases in as a filer’s earnings move toward a maximum value, incentivizing people to leave welfare and for low-wage workers to increase their work hours, according to CBPP.
Research by Brookings Institute shows EITC has the power to lift families above the poverty line. From 2011 to 2013, Brookings estimates EITC kept 272,000 Ohioans out of poverty, more than 150,000 of those children.
Cuyahoga EITC Coalition, organized by Enterprise Community Partners, manages Volunteer Income Tax Assistance (VITA) services, another service for working poor made possible through EITC. VITA helps low-income households file their federal and state income taxes for free, saving EITC recipients from predatory or untrained tax preparation services that can eat into families’ refunds. United Way 2-1-1 schedules all VITA appointments for Cuyahoga County.
“If it was expanded for those people without children and 21-24-year-olds, it could help another 502,000 taxpayers in Ohio,” Feleppelle said. “This really benefits low-income and low-wage workers, so it will expand the help to that other half.”