Bill Would Raise Tax Credit By Thousands of Dollars


Legislation introduced in Congress Monday would raise the earned income tax credit by thousands of dollars for large families, by raising the income limit and amount of children allowed for the anti-poverty measure.

The bill, sponsored by Rep. Jerry Nadler, a New York Democrat, was referred to the House Ways and Means Committee for hearings. A Nadler spokesman told Hamodia on Thursday that the bill was a standalone measure, but “we would not be opposed to it being folded  into a larger tax reform bill.”

A bill expanding entitlements sponsored by a Democrat has a poor chance of succeeding with Congress controlled by the Republican majority. But it may be included in a larger multi-hundred-billion dollar tax overhaul Republicans are currently discussing.

For much of the nation’s poor, the annual federal grant, called the EITC, of approximately $5,000 is the biggest payment they receive throughout the year. But the disbursement on Tax Day is currently limited to the first three children and 45 percent of income.

Nadler’s Tax Fairness for All Families Act of 2015 would allow the tax credit for up to seven children and raise the income level to 65 percent. That would potentially allow a family of seven earning $26,000 to jack up their credit from $5,560 a year to $8,290.

“My district has many large families, often living in or near poverty, and many need help with daily expenses so that they don’t slip through the cracks,” Nadler said in a statement. “My bill responds directly to the needs and concerns of large families, and would help them pay for basic necessities, like food, rent, transportation, and other costs that families with more children incur.”

Families with four children would be allowed to receive the tax credit on up to 50 percent of their income. With five children it goes up to 55 percent of income, six children has a 60 percent maxing out, and with seven or more children, it’s 65 percent.

In an interview with Hamodia in 2013, Nadler said his plan would not cost a lot of money, as there are very few families in the country with more than three or four children earning a sufficiently low income to be eligible for the credit.

The Earned Income Tax Credit is a federal program designed to lift families out of poverty. Even if one does not pay any taxes he is still eligible for it. That is distinct from the child tax credit of $1,000 per child, which mostly only reduces a tax bill, but does not add money if no taxes are paid.

The impetus for the bill came when, at a meeting, Yoel Rosenfeld, a Bobover askan, suggested the idea. Nadler researched it and decided that it was doable.

“It is the Yoel Rosenfeld bill,” Nadler joked.