@NCCapitol

@NCCapitol

NC lawmakers urged to expand earned income tax credit

Posted February 28, 2013
Updated March 1, 2013

A coalition in support of a state tax credit designed to put more money in the wallets of the working poor urged lawmakers on Thursday to keep the measure as a central part of any plan for revenue.

House Republicans have passed a bill that would reduce the earned-income tax credit for 2013 tax returns and then allow it to expire, beginning with 2014 tax returns, as planned several years ago.

The bill, scheduled to go before the full state Senate on Monday, passed after the House defeated a Democratic amendment that would have extended the credit until 2019.

The credit allows families to collect checks if their credit exceeds what they owe in taxes.

Eliminating it would cause a tax shift to nearly 907,000 North Carolinians who filed for the credit, valued at $105 million, in 2011, said the coalition, which includes Action NC, the United Way and the North Carolina Justice Center's Budget & Tax Center.

It would also be another blow to the poor after lawmakers cut unemployment benefits and shortened the length of time the jobless can collect them. They've also voted to bar the state from expanding Medicaid under the federal health care overhaul.

Groups call on lawmakers to keep earned income tax credit Groups say nixing earned income tax credit hurts working poor

Alexandra Forter Sirota, director of the Budget & Tax Center, also noted that it comes at the same time that lawmakers are pushing a bill through the General Assembly that would eliminate the state's estate tax.

"It's a signal that there's a great tax shift going on in North Carolina and that middle- and low-income families are going to feel a significant increase in their tax load while the wealthiest are getting a tax cut," Sirota said. "I think it's a bad signal to send at a time when working families are struggling."

Karen Spain, of Durham, for example, recently took a second job to help make ends meet. Her husband is a handyman.

"We try to live our lives based on what we need, not on what we want," Spain said. "My goal is to get ahead, not stay around a certain poverty level."

For the past few years, they have qualified for the EITC, which averages anywhere from $100 to $300, depending on the size of the family and household income.

Married couples with two children earning approximately $48,000 annually can receive a maximum credit of $269.

"Every dollar matters in this household," Spain said. "We don't take anything for granted."

But Republican lawmakers say they can't support a program with a 25 percent error rate on the federal level, most of which involves some kind of fraud.

They do say there are other programs and services available, such as food stamps, free and reduced-price lunches and Medicaid and foreclosure assistance.

53 Comments

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  • jospolla2 Mar 5, 3:42 p.m.

    i agree, ditch EIC

  • junkmail5 Mar 1, 7:54 p.m.

    Sure, work for a few weeks a year, then you qualify for "EITC" - right?

    Sure. But since how much you get is a fraction of how much you earned you wouldn't get much that way.

    If you worked full time for 2 weeks at minimum wage your EIC credit would be $21.

    Wow, what a great scam! I should quit my job right now and hop on this sweet, sweet, gravy train!

  • Nancy Mar 1, 7:39 p.m.

    Sure, work for a few weeks a year, then you qualify for "EITC" - right? Pathetic fraud enabling and the numbers prove it's being used in fraudulent manners by illegals to the tune of billions.

    People who don't even exist are getting refunds under this program. Several to the same mailbox? Ya, we need to correct this.

  • free2bme Mar 1, 5:20 p.m.

    Republicans continue to be heartless & self serving, caring only about the wealthiest 1%. The NC Legislature especially continues to pass laws that hurt the middle and poor classes. I think they are aiming to wipe everyone else out and get richer off of the backs of true working Americans. NC Legislature continue to be a disappointment to working NCarolinians. The sad part is it took more than the 1% to vote them in so they are hurting the very folks who put them in office. Why would anyone from the middle or poor classes vote for these people again is a mystery to me?

  • junkmail5 Mar 1, 3:16 p.m.

    OK, fair enough. I was looking at the instructions for 1040, starting on page 7, and stepping through the instructions. I saw nothing that indicated you had to work; in fact the phrase "even if you don't need to file" suggests that- Morrigan

    There are specific requirements on when you need to file, if you don't meet them then you don't "need to file"... including a number of situations where you might have worked and earned income.

    That instruction is reminding you that even if you don't "have to" file you might WANT TO file if you're entitled to a refund of taxes paid, or any other tax credit you might qualify for.

    http://www.irs.gov/uac/Do-I-have-to-File-a-Tax-Return%3F

    "You must file a federal income tax return if your income is above a certain level; which varies depending on your filing status, age and the type of income you receive."

    "There are some instances when you may want to file a tax return even though you are not required to do so."

    Then it lists some examples

  • Terkel Mar 1, 3:01 p.m.

    OK, fair enough. I was looking at the instructions for 1040, starting on page 7, and stepping through the instructions. I saw nothing that indicated you had to work; in fact the phrase "even if you don't need to file" suggests that.

    However, the IRS is noted for confusing rules and sometimes giving out conflicting information. Too bad it isn't all in one place - oh but that might mean fewer penalties and interest three years after the fact.

  • junkmail5 Mar 1, 2:20 p.m.

    More welfare. Democracies always fail once the voters realize they can vote themselves gifts from the treasury. Welfare will be the death of this once great nation.
    carlostheass

    And yet barely more than 1% of the nation is on actual welfare, and half of those are children.

    Further, over 90% of all federal entitlements go to:

    Disabled, elderly, and WORKING poor families.

  • carlostheass Mar 1, 1:24 p.m.

    More welfare. Democracies always fail once the voters realize they can vote themselves gifts from the treasury. Welfare will be the death of this once great nation.

  • weasel2 Mar 1, 1:09 p.m.

    Get rid of it. Sorry that they need that extra for gas in their Lexuu or Cadi.

  • junkmail5 Mar 1, 1:05 p.m.

    This might be worth a read-

    http://www.gatherlittlebylittle.com/2012/02/is-the-earned-income-credit-good-tax-policy/

    The EIC is not only a decades old program strongly supported by BOTH sides (Reagan was a big fan for example) but studies have almost universally shown it's an EFFECTIVE program that encourages people to actually work.

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