SUPPORT CHILDREN AND FAMILIES: MAKE THE CHILD TAX CREDIT AND EARNED INCOME TAX CREDIT EXPANSIONS PERMANENT

The Earned Income Tax Credit (EITC) is one of the most effective anti-poverty, pro-working family investments we make as a community. Simply put, it is a tax credit that allows workers with low to moderate incomes to keep more of their hard-earned wages.

Similarly, the Child Tax Credit (CTC) is an investment in children from low- to moderate-income households. It provides a boost to families’ incomes, allowing them to better cover basic costs like food and child care. The Child Tax Credit is proven to significantly reduce childhood poverty while improving infant and maternal health and educational attainment.

United Way’s ALICE Report shows that 38 percent of Michigan families were struggling to afford their basic needs before the first case of COVID-19 showed up in our state. The EITC and CTC are proven tools we can use to help stabilize household budgets in the wake of the pandemic and the economic hardship that came with it.

Federal Child Tax Credit and Earned Income Tax Credit

In past years, not all workers had access to the Earned Income Tax Credit and many families had earnings that were too low to benefit from the Child Tax Credit. Fortunately, the American Rescue Plan temporarily corrects these issues by:

• Expanding the EITC to include individuals 19-24, often students working to pay for their higher education or graduates just starting out on their own.
• Expanding the EITC to include those who are older than 65, covering senior citizens struggling to get by.
• Increasing the EITC for individuals without children, so parents who don’t live with their children full time but still help to pay for their children’s expenses will see a boost to their income.
• Making the CTC fully refundable so low-income families with children will receive a boost to their household income, reducing the burden of the cost of child care, food and other necessities.
• Increasing the CTC to $3,000 per child and $3,600 per child under 6.

If these changes were made permanent, 4.1 million children would be kept out of poverty and 17 million low-paid working adults would become more financially stable. The EITC and CTC not only provide needed support to families and households, they boost local economies. These tax credits can significantly reduce the number of households living below the ALICE threshold while also supporting local businesses.

Tell Congress to support workers and children by making the Earned Income Tax Credit and Child Tax Credit permanent today!

Michigan’s EITC

In 2010 the state legislature cut Michigan’s EITC by 70 percent. Working families saw their tax bills increase by up to $300 — funds households need to pay for essentials like food, clothing and transportation. These few hundred dollars extra go a long way for struggling families striving for financial stability, especially during the pandemic. 

We need your help to encourage state legislators to support an increase to our state’s EITC. 

This is a priority because: 

• It reaches more than 350,000 working families in Metro Detroit and more than 750,000 across Michigan. 
• If doubled to 12 percent, it would bring more than $200 million in tax refunds back to Michigan workers every year. 
• If restored to 20 percent, it would mean nearly $450 million in tax refunds, with an average credit of $600. 
• It has a long-term impact on children’s lives. The modest boost in a family’s income during childhood propels students to succeed in school and earn more throughout their lifetimes. 
• It’s good for the local economy. For every $1 brought into a community through the EITC, $1.67 is generated in new economic activity. 

Take action with us. Tell your legislator to increase the state EITC today!