State EITC Policy Update and Enabling Rapid Response in the States

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1 EITC Funders Network State EITC Policy Update and Enabling Rapid Response in the States Tuesday, March 13, :30 1:45 pm eastern The Webinar will Begin Shortly

2 Webinar Overview During presentations, audience will be on listen only mode. We will take questions during the Q&A portion. How to ask a question: Use the chat function on your screen Raise your hand by pressing *1 on your phone. To lower your hand press #. EITC Funders Network *

3 Webinar Overview I. Welcome II. III. IV. EITC Funders Network Ami Nagle, EITC Funders Network National EITC Policy Landscape Amy Greene and Debbie Stein, The Hatcher Group State EITC Policies -- Recent Developments and What is on the Horizon Erica Williams, Center on Budget and Policy Priorities Overview of the EITC Rapid Response Fund Ami Nagle, EITC Funders Network V. State EITC Battles -- Communications and Policy on the Front Lines Gilda Jacobs and Judy Putnam, Michigan League for Human Services VI. Remy Trupin, Washington Budget and Policy Center Q&A 3

4 Who We Are Who We Are More than 220 Members Every State in the Union Corporate Foundations Family Foundations Community Foundations Governmental Entities United Ways What We Do Meetings Webinars enewsletter Website Consultation EITC Funders Network *

5 NATIONAL EITC POLICY LANDSCAPE Amy Greene Tax Credits for Working Families

6 Earned Income Tax Credit Expanded in 2009 and extended through 2012 Increased maximum benefit by $600 for families with three or more children Increased maximum income threshold before phase-out for married couples by $2,000 Unless Congress acts, an estimated 900,000 families will lose eligibility, and another 7.7 million families would see the value of their credits reduced.

7 Child Tax Credit Expanded in 2001 and 2009, and extended through 2012 In 2001, the credit was doubled from $500 to $1,000 and made refundable for more families In 2009, working parents were allowed to count all earnings above $3,000 in calculating their credit, down from $12,850 Unless Congress acts to extend the 2009 expansion, the credit will be eliminated for an estimated 7.6 million children, and reduced for an additional 10.5 million families

8 Child and Dependent Care Credit Expanded in 2001 and extended through 2012 Increased the maximum allowable dependent care expenses that could be used toward claiming the credit from $2,400 to $3,000 per child (up to $6,000 per family) It also increased the maximum credit rate from 30 percent to 35 percent of dependent care expenses. Unless Congress acts, the maximum credit for families with at least two dependents would go from $2,100 back down to $1,400.

9 Hot Federal Issues EITC Fraud It s really improper payments Making it difficult to promote state credits Overstated Beginning to recognize that commercial preparers (responsible for 60% of EITC claims) are largely responsible Several recent changes to reduce error

10 Hot Federal Issues Prevent Poor Immigrants from Claiming the Additional Child Tax Credit Congress twice refused to require parents to provide their own Social Security numbers to claim a CTC refund Two million taxpaying families, including four million children who are U.S. citizens living in immigrant-headed households, are still eligible This will come up again already required for the EITC, and can be used to offset cost of other legislation

11 State EITCs -- Recent Developments and What is on the Horizon Erica Williams Policy Analyst, State Fiscal Project

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13 State EITC Developments

14 EITC Rapid Response Fund Established by Grantmakers Income Security Taskforce in late 2011 Purpose get funds to state groups fighting EITC battles as quickly as possible to support communications-related advocacy work. Two national funders provided nearly $70,000 to support efforts in four states (MI, OK, KS, and WA) EITC Funders Network *

15 Michigan League FOR Human Services To the Rescue! How Rapid Response Funds Saved the Spirit of the EITC Gilda Z. Jacobs, President & CEO Presentation to: EITC Funders Network March 13, 2012

16 EITC Timeline Michigan League FOR Human Services Legislation passes with Democratic governor, House First year at 10% of federal First year at 20% federal Elections swing Michigan to GOP control EITC on chopping block

17 New political landscape Michigan League FOR Human Services

18 Opportunities.. MIDashboard Michigan League FOR Human Services Governor includes reducing child poverty on his dashboard of indicators of economic strength

19 Multi-prong fight Michigan League FOR Human Services Traditional media Numerous rallies (variety of causes) Postcards, petitions Video Testimony Coalition building Met face-to-face with key members of governor s administration, Legislature

20 Michigan League FOR Human Services

21 Rapid Response Funds Michigan League FOR Human Services Martin Waymire Advocacy Additional communications, coalition help Video Website

22 Michigan League FOR Human Services

23 Saveouteitc.com Michigan League FOR Human Services

24 Michigan League FOR Human Services

25 EITC: Keeping kids out of poverty Michigan League FOR Human Services EITC helped 780,000 households Governor, House & Senate leaders wanted to eliminate Now at 6% (vs 20%) Reduced but still alive

26 Threats and opportunities Michigan League FOR Human Services 2012 more business tax cuts Few legislative champions from majority party Rainy Day funds More revenue

27 2012 strategy Michigan League FOR Human Services Building story bank with partners, mini-grants Fact sheets on EITC with new data Ranking the EITC impact by district send press release to draw attention Show the Tax Year 2012 impact a 70% cut Possible strategy grow legislative champions

28 Michigan League FOR Human Services The Michigan League for Human Services is a state-level policy organization focused on the needs of Michigan s low-income families and individuals. The League was founded in 1912 and is a private, nonprofit charitable organization. Michigan League for Human Servicers, 1223 Turner Street, Suite G 1, Lansing, MI Ph: Fax A United Way Agency

29 Remy Trupin Executive Director Washington State Budget and Policy Center

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32 Q&A How to ask a question: Use the chat function on your screen Raise your hand by pressing *1 on your phone. To lower your hand press #. EITC Funders Network *

33 EITC Funders Network For more information: EITC Funders Network Center on Budget and Policy Priorities The Hatcher Group 33