NC lawmakers urged to expand earned income tax credit

Posted February 28, 2013 6:53 p.m. EST
Updated March 1, 2013 12:17 p.m. EST

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.

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.