WASHINGTON, D.C. – Late last night, the President signed into law a spending package that includes several key tax wins for Ohio that Sen. Sherrod Brown (D-OH) helped secure.
Brown also said there is still more work to be done to fix the tax code in a way that puts working families first. Brown vowed to continue fighting to secure an expansion of the Earned Income Tax Credit or the Child Tax Credit, which are two of the most effective tools we have to put money in the pockets of working people and pull children out of poverty.
“Putting hardworking Ohio families first is my top priority,” said Brown. “This spending bill includes several tax wins that will help put more money in the pockets of working Americans and help our communities continue to grow. I’m glad to see these important initiatives receive broad bipartisan support.”
Brown continued, “At the same time, families are working harder than ever but have less and less to show for it. Congress must do more to help put money back in the pockets of working families and help pull children out of poverty – and that means expanding the Earned Income Tax Credit or the Child Tax Credit. I will never stop fighting to expand these vital programs and set children up for future success.”
Brown secured tax wins for Ohioans in this year-end spending bill, including:
Extension of Health Coverage Tax Credit
Sen. Brown worked with Sen. Portman (R-OH) to include a short-term extension of the Health Coverage Tax Credit (HCTC) through the end of 2020. This credit helps subsidize the cost of continued coverage for retirees and other individuals who lost their health care coverage — in addition to their pensions and other benefits — when their employers either entered into bankruptcy or laid off workers due to foreign trade. Earlier this year, Portman and Brown introduced bipartisan legislation that would extend for five years the Health Coverage Tax Credit (HCTC). The HCTC is critical for many hardworking Ohioans, including as many as 5,000 Delphi salaried retirees in Dayton, the Mahoning Valley, and Sandusky. In addition, a few hundred workers from the Lordstown General Motors plant have applied for Trade Adjustment Assistance (TAA) and would benefit from the HCTC as well.
Elimination of the Tax on Fringe Benefits for Charities, Places of Worship and Nonprofits
Brown worked with Reps. James E. Clyburn (SC-06), Thomas Suozzi (NY-03), and Representative Steven Horsford (NV-04) to secure the inclusion of a tax fix in the Appropriations bill that would eliminate the tax on fringe benefits for charities, places of worship, and other nonprofit organizations. Last Congress, the Republican-passed Tax Cuts and Jobs Act of 2017 raised nearly $1.7 billion from places of worship and other nonprofits by applying the 21% unrelated business income tax to the value of certain so-called “fringe benefits,” such as parking and transit, provided to their employees. This tax would cost charities and places of worship tens of thousands of dollars each. Earlier this year, Brown introduced the Stop the Tax Hike on Charities and Places of Worship Act, which aimed to repeal the provision. Reps. Clyburn, Horsford, and Suozzi introduced companion legislation in the House.
Expansion of New Markets Tax Credits
Brown fought to secure an extension of the New Markets Tax Credit, which was set to expire at the end of this year. The one year extension includes a higher allocation for the program: $5 billion, up from $3.5 billion last year. The NMTC Program was established in 2000 with the goal of spurring revitalization by providing tax credit incentives to Community Development Entities (CDE) so they can invest in low-income communities. Under the program, CDEs apply to the U.S. Treasury Department for the authority to raise a certain amount of capital from investors. Awardees are then given a tax credit that equals a percentage of their investment output over the span of seven years. Since its inception, Ohio has seen billions of dollars in investment through the NMTC program. Brown has been a strong supporter of NMTC and helped secure a five-year extension of NMTC in December 2015.
Extension of the Work Opportunity Tax Credit Program
Brown successfully secured the extension of the Work Opportunity Tax Credit (WOTC), which encourages employers to hire individuals who face significant barriers to employment. The program was extended through 2021. The WOTC provides an employer tax credit of between $1,200 and $9,600 per employee for hiring and retaining individuals that are part of certain targeted groups representing populations that have a difficult time finding work, or are often out of the labor force altogether. The credit amount is based on the qualified wages paid to those employees within the targeted groups. These targeted groups include: veterans, long-term unemployed, ex-felons, the disabled, summer youth employees, and Temporary Assistance for Needy Families, Supplemental Nutrition Assistance Program, and Supplemental Security Income recipients. Brown has fought to make the WOTC program permanent and will continue to fight for permanence.
Funding for Black Lung Disability Trust Fund
Brown secured higher funding levels for the Black Lung Disability Trust Fund, which helps coal miners who have been deemed disabled due to black lung disease. The excise tax on coal that supports the trust fund was allowed to revert to lower levels at the beginning of 2019, which would result in lower resources in the fund over time. Brown fought to restore the excise tax to its previous level, helping to ensure that disabled coal miners have the support they need from the fund.
Lower Taxes on Craft Beverages
Brown is a cosponsor of the Craft Beverage Modernization and Tax Reform Act of 2019, and helped secure a one-year extension of the current tax rates on beer, wine, and distilled spirits. Without this extension, Ohio’s local breweries could have seen their taxes double in January. Ohio’s 298 breweries help to employ nearly 6,000 people and since the first passage of these tax rates two years ago, a majority of those breweries have hired new employees, purchased new equipment, and upgraded their facilities.
Increase in Grant Funding for the Volunteer Income Tax Assistance (VITA) Program
Finally, Brown secured a $7 million increase to the VITA program. Brown secured $25 million in grant funding for FY2020, up from the $18 million previously secured. The VITA program provides support to free tax preparation sites that help individuals and families file their income tax returns. During the 2019 income tax filing season, VITA programs nationwide filed more than 1.5 million federal income tax returns, including more than 419,000 returns for the Earned Income Tax Credit (EITC). This helped Americans claim approximately $1.8 billion they’d earned over the tax year. VITA sites aren’t just a lifeline for those who cannot afford a paid tax preparer – they also have a strong record for accuracy and help reduce IRS administrative costs. According to the IRS, returns claiming the EITC prepared by VITA preparers are 98 percent accurate – the best of any in the tax preparation industry. VITA sites are also more likely to file electronically, helping to save taxpayers money in the process. Brown has long fought to secure funding and support for the VITA program.