CA$H Maine Celebrates EITC Awareness Day, Announces Goal to Help 1,500 Maine Families Take Advantage of Tax Credits and Achieve Financial Stability
AUGUSTA – Members of the Maine legislature joined family success and stability advocates and others today at an event to promote the federal and Maine Earned Income Tax Credit (EITC). The event, in recognition of national EITC Awareness Day (January 29), also celebrated recent legislation making the tax credit refundable for Maine families, and announced the 2016 goals of CA$H Maine to increase the number of people receiving the credit by 5 percent – reaching more than 1,500 Maine workers.
“The EITC is one of the nation’s most powerful poverty-reduction tools, benefiting 72 million people, including 31 million children. But in Maine, too many EITC-eligible workers overlook the credit and miss out on cash back that can be used for emergency savings, goals fulfillment or asset-building,” said Janet Smith, statewide CA$H Maine coordinator and western regional manager of New Ventures Maine, one organizer of the event. “This year, CA$H Maine plans to increase the number of Mainers receiving the tax credit by bringing in new tax filers and stepping up our efforts to reach out to members of target groups, such as individuals with disabilities, service members and Veterans.”
Today’s event comes on the heels of a national report by the Corporation for Enterprise Development (CFED), which found that 47 percent of Maine’s households find themselves in perpetual financial insecurity, unable to build the savings needed to last even three months in the event of an emergency. The research, reflected in CFED’s 2016 Assets Opportunity Scorecard, also found that state policies are doing little to improve the financial security of Maine residents.
The EITC, however, is recognized across party lines as an effective way to reduce poverty and help working families succeed. In fact, Maine’s legislature voted in a signature bipartisan deal last year to make the state’s EITC fully refundable, increasing after-tax earnings for 100,000 working Mainers and their families. Refundable EITCs allow low-income working families to receive the credit in full, regardless of their tax liability. By contrast, nonrefundable credits prevent workers from collecting any portion of the EITC that exceeds the amount they owe in income taxes, which means the lowest earners rarely receive any benefit.
During today’s event, lawmakers applauded CA$H Maine’s efforts to expand the credit to even more Maine families.
The EITC is a clean, simple cash incentive that rewards hard work. It is especially effective for low-income Mainers trying to get back on their feet – whether we’re talking about the dad who’s been laid off and is struggling to find a job that pays the same as his old job – or the single mom working hard to balance work and family,” Rep. Denise Tepler (D-Topsham) said.
“I have been watching the Western Maine CA$H (Coalition) work for the last 10 years,” said Sen. Tom Saviello (R-Wilton). “They provide such a vital service to our local citizens. Their efforts have not only helped our citizens but also helped get money back into our rural economy.”
The CA$H Maine Initiative helps to advance the work of the CA$H Coalitions across the state, which bring together partners to help guide low-income families toward ways to save money, and take advantage of income tax refunds, such as the EITC; use matched savings programs, such as Family Development Accounts and college savings plans, and participate in financial literacy classes.
Another 2016 goal for CA$H Maine will be to increase by 10 percent the number of tax filers who save some of their money for emergencies, education, home or business ownership, or other savings goals.
One speaker at today’s event, Lauren White, is a recent college graduate, who says she was able to make it through college with minimal debt because her mother saved money for her in a college savings account.
“I was able to pursue my dreams of attending a four-year college, without the struggle of yearly student loans,” said White, 22. “College was stressful enough and I was lucky not to have to stress about how to pay for it.”
That’s just the kind of family progress financial stability advocates hope to see from greater participation in poverty-lifting tax credits such as the EITC and the Child Tax Credit (CTC), speakers at today’s event said.
Tony Cipollone, president of the John T. Gorman Foundation – a strong supporter of CA$H Maine and asset-building organizations – praised the EITC because of its “multi-generational impacts.”
According to research, Cipollone said, “low-income children whose families receive the EITC have, on average, better health, higher test scores, and stronger long-term academic achievement — all of which are factors that we know contribute to higher employment and earnings and lower rates of poverty when these children reach adulthood.”
The Internal Revenue Service actively promotes the EITC and other tax credits because of their undisputed ability to help families climb the economic ladder.
“The EITC and CTC greatly reduce poverty for working families,” said Tess Armstrong, senior tax consultant for the IRS. “These working-family tax credits lifted 9.4 million people out of poverty in 2013, including 5 million children, and made 22 million other people less poor. It is a very important tax credit, and it is free help that is available to taxpayers throughout the state.
We encourage anyone who earned $54,000 or less from wages, self-employment or farming in 2015 to see if they qualify for the Earned Income Tax Credit.”
CA$H Maine is a statewide collaboration of 10 coalitions, composed of 50 non- and for-profit partners, working together to help empower Maine individuals and families to achieve long-term financial stability. Since 2003, we have offered free tax preparation to qualified filers during tax season and educated hard-working families and individuals about programs in the community that can increase their income, reduce debt, and build savings. CA$H Maine is a year-round resource, providing outreach and education about ways you can make the most of your money.