Tax Relief for Working Families
The federal Earned Income Tax Credit (EITC) is a tax reduction and wage supplement for low- and moderate-income working families. The credit is based on family size and earnings. For families with very low incomes, the amount of the credit increases as earnings increase until it reaches the maximum for that family size — $428 for families with no children, $2,853 for families with one child and $4,716 for families with two children (figures based on 2007, figures to change annually). The credit begins phasing out for families with children at $16,810 and ends completely at $38,348.
In 2003, about 22 million families claimed the EITC. It now lifts more than 4 million people — half of them children — out of poverty. Because it targets working families, the program has received broad, bipartisan support at the national level.
State and local governments across the country have embraced the program as a means to combat poverty.
How Washington Appleseed is Helping
In collaboration with the Seattle-King County Asset Building Collaborative and other community partners, Washington Appleseed conducted research about the feasibility of implementing a state credit for low-income families, similar to the federal Earned Income Tax Credit.
After helping to lay the groundwork for a strong policy solution, our community partners and allies in the legislature helped to pass the Working Families Credit in 2008.
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While the passage of the Working Families Credit is a significant step in mitigating the regressive tax system in Washington, the bill had an amendment that requires the legislation to be re-approved every year for funding. Unfortunately, the funding for the tax credit has yet to be approved and, thus, the Working Families Credit has not been fully implemented.
Pro Bono and Community Partners
The Seattle-King County Asset Building Collaborative