May 07, 2015
May 07, 2015
With Mother’s Day approaching, it’s a good time to recognize the needs of many working mothers who struggle to make ends meet. We have two important programs designed to help working moms and their families: The earned income tax credit (EITC) and the child tax credit (CTC). Congress and Ohio lawmakers can help Ohio moms by making key improvements to these tax credits.
In 2012, more than 670,000 Ohio mothers claimed the federal EITC and child-tax credit. These credits increase wages and reduce poverty by offsetting payroll and income taxes. They help struggling mothers pay for food, housing, child care and transportation.
These credits have long-term benefits for women and their children, research shows. Children in families that receive tax credits have better health, educational, economic and long-term employment outcomes. Birth weights tend to be higher. Kids get better grades in school. What mother wouldn’t want these benefits for her children?
Key provisions of the federal tax credits are set to expire in 2017. If Congress does not act, 356,000 people in Ohio, including 172,000 children, will be pushed into poverty.
Ohio, like 25 other states, also has its own EITC. But Ohio’s EITC is weak. It’s non-refundable, which means if it exceeds income tax liability, the state won’t refund the balance (the federal EITC, by contrast, is refundable). Ohio also limits the impact the credit has for workers earning $20,000 or more.
Nearly every other state’s credit is refundable, and Ohio is the only state with a crippling income cap. Without refundability, the Ohio credit does little to help working-poor families. A Policy Matters report found that 93 percent of Ohioans earning $19,000 or less receive no benefit from the state credit.
You can support Ohio’s working moms by calling on Congress to make key provisions of the tax credits permanent, and by telling Ohio lawmakers to make the state EITC nonrefundable and remove the income cap.
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