Let’s bring targeted tax relief to almost 600,000 families!
Help Put Virginia’s Working Families First
Help Put Virginia’s Working Families First
Overview
Last year, lawmakers in Richmond left hundreds of thousands of working families out of their tax refund program.
Lawmakers have an opportunity to make a better choice this year, one that helps low wealth communities instead of leaving them out. The General Assembly can strengthen the state’s Earned Income Tax Credit (EITC). The EITC is a tax credit that boosts incomes of working families, including about 600,000 families in Virginia. Yet Virginia’s EITC is not as strong as it could be, because it is not refundable and many families do not receive the full value of the credit they’ve earned.
Legislators can choose to make our state credit refundable, as many other states have already done. Doing so would boost incomes for working families in Virginia and make sure all families who get the EITC can receive the full credit they’ve earned.
Thousands of Virginians are missing out on the full benefits of a time-tested tool that helps hardworking families keep more of what they earn, boosts small businesses and strengthens local economies: a refundable Earned Income Tax Credit. The EITC is a tax credit that helps people earning low wages such as sales clerks, nurses, teaching assistants and construction workers.
Virginia unnecessarily restricts its current work credit. Rather than allow workers to get the full value of the credit they've earned (which is 20% of their federal EITC), Virginia limits its work credit to the value of income taxes owed. The problem is that workers with low and moderate incomes in our state spend more of that income on sales taxes, gas taxes, and fees, than they do on income taxes by virtue of the fact that they have lower incomes. With an unrestricted work credit that lowers the taxes affecting these working families most, Virginians with low and moderate incomes could keep more of what they earn to care for their families and contribute to their local economies.
The additional funds help working families with kids afford the basics like child care and nutritious food, as well as larger investments that help smooth the path to the middle class like a reliable car to get to work or a down-payment on a first home.
A Virginia Work Credit would provide a modest yet critical boost to parents striving to build a better future for their children. Research shows that kids in families getting the federal Earned Income Tax Credit are more likely to excel in school, graduate high school, attend college and earn more as adults.
Working families on the cusp of reaching the middle class stand to benefit most from an improveed Virginia Work Credit. Construction workers rebuilding Virginia's roads and highways, nursing home staff caring for Virginia's elderly, and many others contributing to our quality of life and our economy would benefit.
A Virginia Work Credit would pump millions of dollars into our state's local businesses by putting money directly in the hands of families who spend much of what they earn on the basics and in their own communities. When working families have disposable income to spend in local shops and restaurants, small businesses and local economies thrive.