Offers More Relief To Area Residents
Nearly 365,000 New York City residents would benefit from President Barack Obama’s proposal to expand the Earned Income Tax Credit (EITC), City Comptroller Scott M. Stringer announced in a report entitled “Fighting Poverty and Expanding Opportunity: The Earned Income Tax Credit in New York City.”
“In the era of income inequality, we must take every opportunity to help close the gap. The expansion of the Earned Income Tax Credit would mean $250 million in additional after-tax income for New York City residents,” Stringer said. “This tax credit has been an enormous success in lifting working New Yorkers out of poverty. We must make sure everyone has the opportunity to climb the economic ladder.”
The EITC is a refundable tax credit for working people based on their earnings, marital status and number of children (the maximum annual credit is $8,159 for city residents).
The proposed tax credit extension would:
– provide an additional $250 million in federal benefits to 365,000 households;
– make 350,000 childless New York City households eligible for a credit up to $1,005, an average of $800 per filer;
– make 15,000 low-income workers aged 21 to 24 and 65 to 66 in New York City newly eligible for the credit;
– raise an estimated 40,000 New York households out of poverty; and
– increase the total benefit to poor and working class families in New York City to over $2.9 billion per year when combined with State and city EITC programs.
More than 890,000 New York City residents file for Federal, State and City EITC annually and the program can be credited with pulling 70,000 households out of poverty in 2012, according to estimates by the City Comptroller’s office.
However, despite the enormous success of the EITC, many lowincome New Yorkers remain ineligible for benefits. Childless adults are only eligible if they earn below $14,340 a year-the equivalent of $7.17 an hour at a fulltime job. As a result, a childless adult working full-time at the minimum wage does not receive any benefits.
President Obama’s 2015 Executive Budget would extend the EITC to a larger group of Americans, including lowering the age floor to 21 years old and raising the age ceiling from 65 to 67 years. The plan also calls for doubling the maximum childless worker credit to over $1,000 and increasing the income credit cap for childless individuals to $18,070.
“For far too long, the success of the EITC has been out of reach for thousands of low-income New Yorkers,” Stringer concluded. “When maintaining a full-time job no longer provides sufficient means for escaping poverty, it is imperative we embrace proposals like this expansion, to support our hardworking residents who have watched the cost of living soar as their wages have stagnated.”
