Tax Credits that Help Veteran and Military Families are At Risk
Pro-work tax credits give a boost to thousands of veteran and military households in Wisconsin, but nearly half of those families will lose part or all of their tax credits unless Congress takes action.
Key provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), both of which help families with low incomes make ends meet, are set to expire at the end of 2017. These federal credits encourage work, help children do better in school, improve the health of children and families, and strengthen the future workforce.
In Wisconsin, hundreds of thousands of households – including 36,000 veteran and military households – benefit from the EITC or the part of the CTC that benefits families with low incomes. However, 17,000 of the veteran and military families that benefit will lose part or all of their tax credits if Congress doesn’t act to protect improvements to those credits.
Here is what’s at stake if Congress does not save the EITC and CTC improvements:
- Married couples in Wisconsin that receive the EITC will be subject to higher marriage penalties, resulting in a smaller credit.
- Working families with more than two children will have their EITC reduced. If Congress doesn’t act, the maximum credit amount for families with three or more children will fall by more than $700 at the end of 2017.
- The earnings needed to qualify for the CTC would jump from $3,000 to $14,600, barring many parents who work at minimum wage from receiving any benefit from the credit. The earnings needed to qualify for the full CTC would increase from $16,300 to nearly $28,000 for a married couple with two children.
This fall, Congress may vote to extend or make permanent a number of business tax breaks. Tax breaks for businesses shouldn’t take precedence over tax credits for working families. If Congress votes to make the business tax breaks permanent, lawmakers should take the opportunity to show their support for working families by making the improvements to the ETIC and CTC permanent as well.
Veteran and military families that are working hard to make ends meet deserve support. This Veterans Day, Congress can help veteran, military, and other families work their way out of poverty and climb the economic ladder by taking action to save improvements to the EITC and the CTC.
For more about what’s at stake, read our publication: Failure to Save Key Provisions to Tax Credits Would Harm Wisconsin Families.