Working Families Deserve More from Trump Administration’s Tax Reform Plan

By Yuqi Wang, Policy Analyst, Economic Policy Project, NCLR

In an attempt to squeak in a policy win during his first 100 days, President Trump released a tax reform outline this week. Unfortunately, the big tax reform reveal was simply a one-page outline that was thin on details. The little content that was shared makes it clear that the president plans to line the pockets of the rich and provide very little support to working families. The tax reform outline also runs directly counter to the Trump administration’s pre-election promises about tax reform—that reform would not reduce revenues, not cut taxes for the wealthy, and benefit working families.

The proposal places too much emphasis on rewarding the wealthy and corporations. Plus, there’s no way to pay for it, which means we’re looking at either a very large increase in the national debt, or huge reductions in federal spending, neither of which benefits middle-class workers.

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Four Things for Latino Families to Remember on Tax Day

By Yuqi Wang, Policy Analyst, Economic Policy Project, NCLR

For many Latino households, the tax refunds they receive every April is one of the largest influxes of cash they receive all year. The refunds help families pay debts, keep them out of poverty, and help to buy necessities like clothes and groceries. Below are a few things for Latino families to keep in mind as the 2016 tax filing season wraps up today.

1. You may be eligible for critical refunds, such as the EITC or CTC. Filing your taxes means that you might be eligible for critical refunds like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). The EITC and the CTC are two refundable tax credits that benefit low- and middle-income earners. They increase the earnings of lower-income workers, reduce child poverty, make low-wage work more rewarding, and offset the effect of paying regressive payroll taxes. Both credits raised more than nine million Americans out of poverty in 2015, and made 22 million others less poor. It is important to note that taxpayers filing with an ITIN number are eligible to claim the CTC, but not the EITC.

2. If you file your tax return with an ITIN, you may need to renew your ITIN to get a refund. Under legislation passed by Congress in 2015, the IRS requires that certain taxpayers renew their ITINs before they submit their tax return and claim certain tax credits, primarily the Child Tax Credit. Affected ITINs expired on January 1, 2017, and unless renewed, taxpayers using expired ITINs on their tax returns will face a delay in receiving eligible tax refunds. For more information and resources on renewing ITINs, visit nclr.us/ITIN.

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4 Things You Need to Know About the Earned Income Tax Credit

Today is dedicated to raising awareness of a federal tax credit heralded as the single most effective antipoverty program for working age people. Indeed, the Earned Income Tax Credit (EITC) brought 6.5 million people above the poverty line in 2015, including 3.3 million children. The credit also reduced the severity of poverty for another 21.2 million people, including 7.7 million children.

For all of EITC’s successes on reducing poverty, only four out of five eligible taxpayers successfully claim it on their federal tax returns every year, which means that more than 6 million people leave money on the table during tax time. With the 2017 tax season already underway, we must arm ourselves with information about the EITC before filing our tax returns. This knowledge could make the difference between paying less in taxes, no taxes, or even receiving a tax refund.

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Expand the EITC, Expand Workers’ Livelihoods

By Yuqi Wang, Economic Policy Analyst, NCLR

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The latest Census data on income and poverty is proof that hardworking Americans and targeted policy interventions can create profound economic change. In 2015, there were 3.5 million fewer Americans living in poverty. The Latino community, in particular, saw immense improvements in health and economic stability, including a rise in household income from $42,491 in 2014 to $45,148 in 2015.

One program that lifted 27.5 million working families above the poverty line in a single year is the Earned Income Tax Credit (EITC). It fights poverty by decreasing low- and moderate-income workers’ federal taxes and provides a refund when workers’ tax obligations fall below $0. The EITC is a critical infusion of cash for many hardworking families, helping them pay rent, put food on the table, and pay down debt.

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New Law Creates Challenges for Immigrants Trying to File Taxes

Guest blog post by Max Moy-Borgen, Tax Program Manager, Mission Economic Development Agency

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Photo: John Morgan

Last December, Congress passed legislation that will make it more difficult for immigrants with an Individual Taxpayer Identification Number (ITIN) to file and pay their taxes. Immigrants with older ITINs will have to revalidate their number based on a schedule specified in the law.

I oversee tax preparation for low-income and immigrant families at the Mission Economic Development Agency (MEDA), the largest free tax preparation service in San Francisco, with four Volunteer Income Tax Assistance sites in the city that help 4,200 clients each year. From my experience, I know that if this requirement is not implemented properly, it will have a detrimental effect on those who are just trying to pay their taxes.

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