WASHINGTON, D.C. – Today, U.S. Sen. Sherrod Brown (D-OH) introduced the Working Families Tax Relief Act, which would extend and expand two tax credits critical to Ohio families – the Earned Income Tax Credit and the Child Tax Credit.

“Too many Americans work hard and play by the rules only to find themselves struggling to make ends meet each month. To help these workers, we must support programs that give working families a hand up when they need it most,” said Brown. “The Earned Income Tax Credit and the Child Tax Credit lift families out of poverty, provide an incentive to work, and put real money back in the pockets of working Ohioans. That’s why expanding and strengthening these tax credits is so important for the thousands of Ohio families who have earned these benefits.”

The Working Families Tax Relief Act would expand and extend the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). In addition to making the 2009 expansion of both tax credits permanent, the bill would expand EITC for childless workers, index the CTC to inflation, and make it easier for working Americans who qualify to claim the EITC.    

The EITC is a refundable tax credit for low-income Americans that encourages work and helps families make ends meet. In 2012, more than 24 million taxpayers – including nearly 868,000 Ohio households – received a lump sum refundable credit through EITC after filing their taxes. The average EITC refund for all Ohio families was $2,310. A county-by-county report on Ohioans who benefited from the EITC in 2012 is available here. The CTC is available for taxpayers with children in the amount of up to $1,000 per child under age 17.  

Brown has been a strong voice for EITC in the Senate, and led Democratic efforts in December to prevent making certain business tax provisions permanent without also making the expiring EITC and Child Tax Credit provisions permanent.

Earlier this year, Brown announced a bill that would create an Early Refund Earned Income Tax Credit (EITC) as an alternative to payday loans – which can carry hidden fees and annual interest rates as high as 500 percent. The Early Refund EITC is an alternative to costlier, predatory lending options. Brown’s plan would allow working Americans to draw upon already-earned EITC benefits before tax day. Instead of receiving traditional lump sum payments at tax time, workers who are eligible for EITC could opt to receive the Early Refund EITC – a zero-interest, zero-fee advance on the tax credit for which the worker has already qualified. If the EITC remains unchanged, 833,000 Ohioans and 23.6 million Americans would be able to access a substantial Early Refund EITC – $500 for families with children and $133 for workers without children – according to the Center for American Progress.

In addition to his bill to extend EITC and CTC, Brown is also supporting efforts to: 

  • Increase the Size and Refundability of the American Opportunity Tax Credit (AOTC): The AOTC is a refundable credit that helps pay for post-secondary education. Currently the credit is only available to students attending school at least half-time. Under the new proposal, a partial AOTC would be made available to part-time students. 
  • Provide New Credits for Couples: The proposal would provide an enhanced deduction for couples with a secondary earner in the household.
  • Expand the Child and Dependent Care Credit: The proposal would increase the maximum Child and Dependent Care Tax Credit to $3,000 for every child under 5 in households earning less than $120,000.

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