In News Releases

FOR IMMEDIATE RELEASE
January 27, 2017

Contact: Alex Rossman
Michigan League for Public Policy
Phone: 517.487.5436
E-mail: arossman@mlpp.org

Michigan League for Public Policy encourages families to apply for EITC, Legislature and Congress to pass expansions

LANSING, Mich. — Today, Friday, January 27 is Earned Income Tax Credit (EITC) Awareness Day, raising awareness in Michigan and across the nation about the eligibility of many working men and women with low incomes for the credit and to advocate for the expansion of the EITC at the state and federal levels.

The federal EITC was started under President Gerald Ford and expanded by President Ronald Reagan, and House Speaker Paul Ryan (R-Wisconsin) has advocated for its expansion as a valuable tool to encourage work while fighting poverty. Twenty-six states including Michigan and the District of Columbia have enacted their own version of the federal EITC to help working families earning low wages meet basic needs.

The Michigan EITC took effect in 2008, providing a significant economic boost to the state. But starting in 2012, the state-level EITC was cut in Michigan from 20 percent of the federal credit to 6 percent, dropping the average credit received from $446 in tax year 2011 to $143 in tax year 2014. Additionally, the state EITC pulled nearly 6,800 taxpayers out of poverty in tax year 2014 compared to 22,000 in tax year 2011. State legislation, Senate Bill 26, has already been introduced this session to restore the Michigan EITC to 20 percent of the federal credit.

“As Michigan continues to rebound economically, the recovery is not being felt by workers at every level. It is imperative that the Legislature do more to help the people in our state who are working but still living in poverty,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “We’re calling for a full reinstatement of the EITC in Michigan. The EITC promotes economic opportunity, helps hardworking families make ends meet and enhances the lives of children. It promotes work, improves tax fairness, reduces poverty and boosts local economies statewide.”

Jacobs noted that workers in rural communities and urban neighborhoods alike benefit from the state and federal EITC, with nearly every dollar received as a tax credit spent in local economies. Click here to see individual county data on how many households benefit from the EITC, how much money it contributes to local economies and how residents and businesses would benefit from reinstating the state EITC to 20 percent.

Proposals are circulating at the federal level to expand the EITC to workers with low wages who are not currently raising children in their homes. These proposals would make between 459,000 and 541,000 workers in Michigan eligible for an EITC or allow them to receive a larger EITC, including up to 27,000 veteran and military members, 98,000 rural households and 160,000 workers under the age of 25.

“No worker should be taxed into or deeper into poverty, but that’s exactly what our current tax system is doing to workers without any dependents,” said Jacobs. “Bipartisan proposals to expand the EITC at the federal level to struggling workers not currently raising children in the home will lift hundreds of thousands of workers out of poverty in Michigan.”

About 775,500 taxpayers, raising over 1 million children, received the state EITC, claiming $111.2 million in credits in tax year 2014 at an average credit of $143 per taxpayer. The average state EITC recipient had an adjusted gross income of $17,866 and the average credit for a taxpayer raising two or more children was over $215. Click here for qualifying information at the federal level and click here for qualifying information at the state level. Residents can also see if they are eligible for the EITC and get free tax help at michiganfreetaxhelp.org.

###

The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on economic opportunity for all. It is the only state-level organization that addresses poverty in a comprehensive way.

Leave a Comment