On Friday, Senators Dick Durbin (D. IL) and Sherrod Brown (D. OH) introduced a new bill that could help keep millions of working families out of poverty:
http://www.kfvs12.com/...
According to Durbin, the Working Families Tax Relief Act of 2013 makes permanent provisions of the American Tax Payer Relief Act that are set to expire after only five years, and strengthens and expands the eligibility of the Earned Income Tax Credit (EITC) and enhance the Child Tax Credit (CTC).
"This bill is pro-family, pro-work legislation that would strengthen refundable tax credit provisions that have helped lift millions of working families out of poverty," Durbin said. "The Child Tax Credit and the Earned Income Tax Credit encourage work, help families make ends meet, and lead to healthier and better educated children. I look forward to working with Senator Brown and many of my colleagues to ensure that these critical provisions are included in tax reform." - KFVS 12, 4/26/13
Here's a little more info the legislation:
http://thehill.com/...
More than two dozen other lawmakers have joined on to the legislation, according to a release about the bill, including Senate Finance Chairman Max Baucus (D-Mont.).
The EITC and the child tax credit were both expanded in the 2009 stimulus package, and the enhanced credits were then extended in the “fiscal cliff” deal signed early this year after Democrats made the tax breaks a priority.
The American Opportunity Tax Credit, which helps families with education costs, was also extended in that deal, and Democratic lawmakers are seeking to permanently extend that as well.
Both the EITC and the child tax credit are refundable tax breaks for families. The child tax credit gives qualifying families up to a $1,000 tax break per child. In 2012, the maximum EITC payment was close to $6,000, for certain families with at least three children.
The bill from Brown and Durbin would make the EITC more accessible to families without children, and reduce the age a taxpayer becomes eligible to 21. - The Hill, 4/26/13
Here's some more details from Senator Brown's website:
http://www.brown.senate.gov/...
Make permanent enhancements to the Earned Income Tax Credit: Working families with two or more children qualify for an EITC equal to 40 percent of the family’s first $12,570 of income. The Recovery Act increased the EITC to 45 percent for families with three or more children, and the bipartisan agreement to avert the fiscal cliff extended these reforms for five additional years, through 2017. The EITC has a long history of bipartisan support dating back to its creation in 1975 and its expansion in the bipartisan 1986 Tax Reform Act. According to recent estimates, allowing the expanded EITC to expire would increase taxes on 6.5 million families with income below $50,000.
Make permanent enhancements to the Child Tax Credit: The CTC allows a family to reduce federal income tax liability by up to $1,000 per child. CTC became public law in 1997 through a bipartisan agreement. The 2001 “Bush” Tax Cuts began a phased in increase of the credit from $500 - $1,000 and an increase in the refundable portion of the bill. The Recovery Act reduced the salary threshold for claiming the refundable portion of the credit to income above $3,000. An analysis of Census data showed that these provisions lifted 900,000 people above the poverty line in 2011. According to recent estimates, letting the expanded CTC expire would increase taxes on 12 million families who would see the size of their CTC credit shrink, and five million families would no longer be eligible for the credit at all.
Strengthen the Earned Income Tax Credit: The legislation would expand access to the credit, allowing a full time worker receiving the minimum credit to be eligible for the maximum EITC. The bill will also make the credit available to workers without children.
Change the Eligibility Age: Under current law only individuals older than 25 and younger than 65 are eligible for the childless component of the EITC. The legislation would make individuals older than 21 and younger than 65 eligible.
Simplify the Earned Income Tax Credit: The legislation would eliminate a major source of inadvertent fraud by simplifying the rules for claiming the EITC. This bill makes it simple for parents to understand who claims a child and for divorced parents to properly file. The bill also simplifies rules that penalize working families from saving and investing their savings.
Senator Brian Schatz (D. HI) became the latest Senator to co-sponsor the bill:
http://hawaii.news.blogs.civilbeat.com/...
The measure, sponsored by U.S. Sens. Sherrod Brown, D-Ohio, and Dick Durbin, D-Ill., would expand tax credits that fund poor families and children.
The proposal would make permanent Earned Income Tax Credits, which allows families to reduce federal income tax liability by up to $1,000 per child.
“This legislation would benefit Hawaii’s hard-working families by ensuring they take home more of their paycheck in order to put food on the table,” said Sen. Brian Schatz. “I thank my colleagues Sens. Durbin and Brown for taking the lead on providing tools for families that work hard so that they can live the American dream.” - Honolulu Civic Beat, 4/26/13
If you'd like to get more information about the Working Families Tax Relief Act of 2013, please contact Senators Durbin and Brown's offices for more info:
Durbin: (202) 224-2152
Brown: (202) 224-2315