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October 8, 2015

A Lifeline for Rural Families


Unless Congress acts soon, thousands of families struggling to make ends meet in rural Virginia will have even less money to pay for basic necessities.

The problem is that key provisions of the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are scheduled to expire.

Roughly 115,000 families living in rural areas of the state and paid too little to get by rely on these two critical tax credits for what amounts to an annual boost in their wages. When these families go to file their taxes each year, these credits reduce what they owe in federal taxes, enabling them to keep more of their hard-earned wages.

If these two provisions expire as planned at the end of 2017, 59,000 rural Virginia families would pay the price for Congress’ inaction. That’s close to 10 percent of all those in the state who get the credits. Without action by Congress, families with more than two children will see their maximum EITC credit drop by $700. On top of that, some low-wage working families will no longer be eligible for the CTC because – strange as this sounds – their annual income will actually be too low. A family that earns just $3,000 can qualify right now, but after 2017 if the provisions expire, it would need to make $14,700 to get even a tiny CTC. A single mom with two kids working full-time at minimum wage wouldn’t even get a penny, losing $1,725.

Families living in rural communities are more likely to lose all or part of their EITC and CTC than families at the same income level living in or close to a city.

Ironically, some members of Congress now are considering extending or making permanent certain tax credits for businesses that will soon expire. Struggling families need help first. If Congress makes all or even one of those business tax credits permanent, it’s only right to also offer help to the millions of struggling families throughout the country and Virginia by making the tax credits they rely on  permanent, too.

Maintaining these tax credits for hard-working families is not just good for them. It helps businesses too. That’s because low-wage working families typically spend their earnings at local stores on groceries, medicine, a warm coat and other basics. Some use their tax credits toward college tuition or text books, so they can get training and education to land a better job and help build a more secure future for their families.

Virginia can’t thrive without a healthy economy and stable families. If Congress is going to scratch the back of business, it should also throw a lifeline to families.

–Jeffrey Connor-Naylor, Program Director

Photo: Andrew Tabor Bain CC-BY-2.0

The Commonwealth Institute

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