Refundable Tax Credits
Income and work supports may be provided through the tax system as well as through benefit programs. The most important tax credits for low-income households are the refundable Earned Income Tax Credit and the Child Tax Credit (credits that together lifted an estimated 8.7 million people out of poverty in 2011), and the partially refundable American Opportunity Tax Credit, which reduces the cost of postsecondary education. These credits were improved by the 2009 American Recovery and Reinvestment Act, and these improvements were extended through 2018 by the American Taxpayer Relief Act of 2012.
Nov 9, 2016 | PERMALINK »
Veterans Defended Us, Now We Need to Defend and Strengthen the Safety Net for Them
By Jessica Gehr
Veterans have made enormous sacrifices to protect our country. Yet, when they return home, many struggle with poverty and economic insecurity. According to the 2015 American Community Survey by the U.S. Census Bureau, 1.2 million or 7 percent of veterans live in poverty, many of whom are facing complex problems such as post-traumatic stress disorder (PTSD). Poverty and economic insecurity persist in spite of training opportunities such as the GI Bill for educational benefits and the Department of Labor’s Veterans Employment and Training Service (VETS), which provides employment resources and opportunities. Safety net programs can make a big difference in helping low-income veterans.
The Earned Income Tax Credit (EITC) is one of the most important anti-poverty programs in the country, rewarding work and helping working families save, pay bills, or cover other expenses. But workers without dependent children are excluded from most of the benefits of the EITC. President Barack Obama and Speaker Paul Ryan (R-WI) have put forth almost identical proposals to strengthen the EITC for workers not raising children. Under this proposal, about 630,000 veterans and military members would become eligible for the EITC or receive a larger credit. Senator Sherrod Brown (D-OH) and Representative Neal (D-MA) have introduced more robust proposals to strengthen the credit and extend eligibility, benefitting approximately 716,000 veterans and military members.
The Supplemental Nutrition Assistance Program (SNAP) is the nation’s most important anti-hunger program. In recent years, an average of 1.7 million veterans lived in households that received SNAP. The program’s three-month time limit denies basic food assistance for unemployed adults aged 18-49 who aren’t disabled or raising minor children, regardless of how hard they are looking for work. This three-month limit had been suspended in response to the Great Recession and then reinstated in many states at the end of 2015, forcing an estimated 60,000 veterans off of benefits this year. State agencies need to ensure they are effectively evaluating the ability of applicants, particularly veterans, to work so that they do not lose critical nutrition benefits. States should implement sensible screening methods for exemptions to the time limit and ensure that robust employment services are available for those who are subject to these requirements.
On a single night in January 2015, 47,725 veterans were experiencing homelessness. Veterans make up 9.2 percent of the U.S. adult population but comprise 11.5 percent of the sheltered homeless adult population. The Obama Administration developed Opening Doors, the first comprehensive federal strategy to prevent and end homelessness. Complex factors contribute to the number of homeless veterans including post-traumatic stress disorder, disabilities, substance abuse, lack of social support networks, and a shortage of affordable housing.
Poverty among veterans is a sign of the holes in the American safety net. This Veterans’ Day, we should commit to closing these holes to support those who defended us.
- Katherine Saunders and Elizabeth Lower-Basch | Apr 01, 2015 Education Tax Credits: Refundability Critical to Making Credits Helpful to Low-Income Students and Families
- Helly Lee and Andrea Barnes | Sep 16, 2014 EITC Expansion Proposals: What’s at Stake for Young Workers
- Elizabeth Lower-Basch | Aug 07, 2013 Poverty Trends: Declining Wages Require Growing Income Supports
- Elizabeth Lower-Basch and Julie Strawn | Apr 15, 2013 Comments on Education and Family Tax Benefits
- Helly Lee | Feb 04, 2013 Research Shows Long-Lasting Benefits of EITC
- Nov 09, 2016 Veterans Defended Us, Now We Need to Defend and Strengthen the Safety Net for Them
- CLASP | Oct 04, 2016 Stop-Gap Continuing Resolution Passes Congress
- Sep 30, 2016 Maintaining the Momentum to Reduce Child and Family Poverty: In-Depth Lessons from the 2015 Census Poverty and Income Reports
- Sep 07, 2016 Labor Day underscores the importance of rewarding work
- CLASP | Aug 16, 2016 2013-2014 Bi-Annual Report