WASHINGTON, D.C. – During a news conference call today, U.S. Sen. Sherrod Brown (D-OH) called for passage of critical tax relief that has helped more than 1.5 million Ohioans claim more than $3.2 billion in tax refunds in 2012. As Congressional leaders negotiate a tax extenders deal, Brown is urging the permanent extension of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) refundable tax credits. These credits encourage work, help families make ends meet, and lead to healthier, better educated children.

“Corporations need certainty so they can make investments – working Americans deserve certainty so they can make ends meet,” Brown said. “These tax credits provide critical tax relief but we can still do more to help Ohioans who work hard and take responsibility bring home more of their pay each month.”

Last week, reports surfaced that Congressional leaders were pursuing the permanent extension of several business tax credits without permanently extending tax relief important to working families like enhancements to the EITC and the CTC. President Reagan called the EITC the “most effective anti-poverty program in the U.S.”

In 2013, the EITC helped lift out of poverty more than 31 million taxpayers. More than half of these taxpayers - some 16 million filers – were lifted out of poverty due to enhancements to the EITC that are set to expire in 2017 unless Congress acts. Today, Brown reaffirmed his call that any tax relief made permanent through the tax deal must include EITC and CTC enhancements.

Nearly 945,000 Ohioans claimed more than $2.1 billion in EITC tax refunds and nearly 817,000 Ohioans also claimed more than $1 billion in CTC tax refunds in 2012. More than 200,000 Ohioans qualified for both EITC and CTC. County-by-county data on the number of Ohioans who have recently benefited from the credits and the amount of their return is available here.

Brown, a member of the Senate Finance Committee, introduced the Working Families Tax Relief Act in March 2014. Brown’s bill would not only make permanent enhancements to the EITC and CTC, it would also expand them to include working adults without children. In contrast to the EITC for working families with children, the EITC for workers without children remains extremely small—too small even to fully offset federal taxes for workers at the poverty line. Under current law, workers without children or noncustodial parents working full-time are only eligible to receive a minimum benefit. Such an individual would receive the maximum EITC if he or she had children. As a result, low-wage workers not raising minor children are the only Americans taxed into poverty. Specifically, Brown’s bill would:

  • Strengthen the Earned Income Tax Credit: The legislation would expand access to the credit, allowing a full-time worker receiving the minimum credit to be eligible for the maximum EITC. The bill would also make the credit available to workers without children.
  • Index the Child Tax Credit for Inflation: Under current law the credits size and eligibility threshold are not indexed for inflation. The bill will index both to inflation prospectively.
  • Change the Eligibility Age: Under current law only individuals older than 25 and younger than 65 are eligible for the childless component of the EITC. The legislation would make individuals older than 21 and younger than 65 eligible.
  • Make permanent enhancements to the Earned Income Tax Credit: Working families with two or more children qualify for an EITC equal to 40 percent of the family’s first $12,570 of income. The Recovery Act increased the EITC to 45 percent for families with three or more children, and the bipartisan agreement to avert the fiscal cliff extended these reforms for five additional years, through 2017.
  • Make permanent enhancements to the Child Tax Credit: The CTC allows a family to reduce federal income tax liability by up to $1,000 per child. The 2001 “Bush” Tax Cuts began a phased in increase of the credit from $500 - $1,000 and an increase in the refundable portion of the bill. ARRA reduced the salary threshold for claiming the refundable portion of the credit to income above $3,000.