For Immediate Release
February 1, 2017
Annual resource guide outlines numerous federal and state tax credits available to working families
LANSING—The Michigan League for Public Policy’s annual Money Back in Michigan report released today outlines seven different federal and state tax credits that offer thousands of dollars to Michigan taxpayers but are often overlooked. Many workers aren’t aware that they are eligible for these credits and don’t apply for them.
The information on each tax credit includes specific guidelines on how to determine if you are eligible and how to apply for the credit. In addition to reaching residents directly, Money Back in Michigan also includes sample articles for media outlets and organizational e-news and newsletters, fliers for posting in local businesses and community centers, and printable materials to be shared by partner groups, libraries and elected officials.
“Too many Michigan residents across the state are working hard but still struggling and these credits can make a huge difference in their lives, but only if they know about them,” said Gilda Z. Jacobs, president and CEO of the Michigan League for Public Policy. “This money often goes directly back to the local economy to pay for gas, groceries or child care, keeping these workers afloat while also benefiting our communities. We see everyone who interacts with Michigan residents as a partner in promoting these vital tax credits and hope everyone will join us in spreading the word.”
The federal and state Earned Income Tax Credits (EITC) are the most significant tax credits available to Michigan workers, and the League is working hard to promote them to those that are eligible. For tax year 2016, a two-parent family with two children can receive up to $5,572 (depending on income level) from the federal EITC. For the 2014 tax year (most current state data available), about 775,500 households received the Michigan EITC, putting $111.2 million back into the local economy.
But the League is also looking to expand these credits to help more residents.
If the Michigan EITC were restored to 20 percent of the federal credit, as it was in 2011 before being cut by the Michigan Legislature, the average credit would have been $477 instead of the $143 it was. Additionally, the state EITC pulled nearly 6,800 taxpayers out of poverty in tax year 2014 compared to 22,000 in tax year 2011.
The League is urging Congress to expand the federal 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.
“The EITC is an extremely effective pro-work, anti-poverty tool, and lawmakers should be working to improve its reach and impact,” Jacobs said. “The federal EITC is still leaving out half a million Michigan workers entirely, taxing many into poverty in the process. Restoring the Michigan EITC back to 20 percent of the federal credit will have a major impact on working families and the cities and towns they live in.”
County data on the Michigan EITC, including how many households received it, how much money it contributed to the local economy and what the benefits of restoring it would be is available at www.mlpp.org/our-work/eitc. State legislation, Senate Bill 26, has already been introduced this session to restore the Michigan EITC to 20 percent of the federal credit.
Taxpayers should be aware that due to new practices, the IRS will not issue refunds for the federal EITC or Child Tax Credit until after February 15th. People should avoid refund advances or loans, as they often have very high interest rates. 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.