Congress Introduces Bill Improving Access to the Earned Income Tax Credit

At a June 25, 2008 press conference, Rep. Rahm Emanuel, D. Ill., and Sen. Charles Schumer, D. N.Y., announced new legislation that would significantly improve the accessibility of the Earned Income Tax Credit (EITC), a key program in America’s fight against poverty. They were joined at the press conference by representatives of Wal-Mart and the Service Employees International Union (SEIU), both of which announced their support of the bill.

“The Earned Income Tax Credit isn’t an infomercial promising magic money,” stated Nancy Zirkin, executive vice president of the Leadership Conference on Civil Rights (LCCR). “It’s the real deal - a program that lets working Americans keep more of their money, lifts families out of poverty, and helps them save for the future.”

The EITC supplements the income of working individuals and families by giving an income tax credit to low-income workers who qualify for and claim the benefit.

Currently, the IRS estimates that 20% of eligible recipients do not take advantage of the credit, either due to lack of knowledge about it, or because of the complexity of the program. The bill would require employers to provide information about the EITC to potentially eligible employees along with their W-2 forms.

Rep. Emanuel cited his office’s experience running tax clinics in his Chicago district as a motivation for the bill, proclaiming that he was overwhelmed with requests for assistance and thus forced to turn away as many as 30 families a day who were looking for help with their tax returns. Without the aid of an accountant, many of these families are unable to claim tax credits they are eligible for.

The tax credit, Rep. Emanuel said, acts as a “ladder up” for the working poor who - even with a steady job - struggle to make ends meet in the face of rising gas, food, and housing costs.

Already, the bill has attracted widespread support. Wal-Mart announced they will voluntarily inform their employees about EITC eligibility starting with the next tax cycle. Likewise, SEIU declared strong support for the initiative, which they characterized as crucial for the economic security of working families as wages continue to lag behind increases in the cost of living.

Go to the Leadership Conference on Civil Rights website.