More Money in your Pocket!
Legislation Seeks to Improve the State Earned Income Credit (EIC)
We all know Maine workers who struggle every day to provide for their family’s basic needs. Today, working one, two or even three jobs doesn’t always
do it. Maine people need more money in their pockets, especially
in these times as prices are rising and wages are losing value. To make this happen, MAIN and Maine Equal Justice want to improve the State EIC program
in this legislative session.
In 1975, Congress passed legislation that created the Federal Earned Income Credit (EIC) for low to moderate-income working individuals and families
with children. Today it also serves some very low-income individuals or couples without children at home. Its purpose is to lessen the burden of social
security taxes, reduce poverty and provide an incentive to work.
The Federal EIC is “refundable.” This means that a working low-income family that does not have to pay income tax would be able to get a refund under
the program. In tax year 2006, 89,000 working families in Maine
received this credit, worth $147.5 million dollars.
This national program is regarded as one of the country’s most effective anti-poverty programs. Many states have created their own earned income tax
credits because of this. The state credits are a percentage of the federal credit, ranging from 5-40% of the federal credit. Today 24 states have a
state EIC; in 21 of these programs, the tax credit is refundable.
You Can Help Make Make Maine’s EIC Better!
Maine’s EIC is set at 5% of the federal credit and is not refundable. Maine has one of the smallest credits in the nation, and is one of only three
states in which the credit is not refundable. Approximately 50,000 Maine families received the Maine credit in 2008 for a total value of just over $4
million dollars.
This legislative session, Representatives Peter Stuckey (D-Portland) and Patsy Crockett (D-Augusta) have introduced a bill to improve the State EIC.
This bill would raise Maine’s EIC from 5% of the federal tax credit to 25%.
It would also make it “refundable.” If passed, this credit would put more money into the pockets of Maine families who are struggling to meet their
basic needs.
Here’s what MAIN members have said about past proposals to increase the State’s EIC:
“This credit would come in handy when my car needs repairs.”
“I could have used it back in February when I got behind on the electric bill.
Instead, I had to go for emergency assistance.”
“With the price of oil, food and everything going up, we could use this credit so we don’t get too far behind.”
Who would be helped if this bill becomes law?
- Any worker who is eligible for Maine’s EIC would receive more money if this bill becomes law.
- Any worker who is now eligible for the Federal EIC but not the Maine EIC
because they don’t have to pay income tax. These workers would become
eligible because this bill makes the credit “refundable.” This means that they would get it even if they earned so little money they didn’t have to pay
income tax.
Why increase Maine’s EIC?
- Workers in the bottom 30% of all wage earners saw a 1% decline in real wages between 2001 and 2007.
- The child poverty rate in Maine now equals nearly 15%.
- The number of households without enough food in Maine has recently increased at a faster rate than any other state. We now rank second in the nation—just
behind Mississippi—for the percent of families suffering from very low food security.
- Individuals with lower income pay a higher percentage of their income in state and local taxes than those with higher incomes.
Watch for MAIN email alerts for information about how you can help improve Maine’s EIC.
If you get the Earned Income Credit, contact us now to see how you can help. If you want to help or want more information, please call Crystal Bond at
1-866-626-7059 ext. 205 or email her at cbond AT mejp DOT org.
Current EIC Eligibility
The following people are currently eligible for the federal EIC. They also qualify for the State EIC if they owe income tax.
Workers, if their income in 2008 was below:
- Single parents with one child--$33,995
- Two parents and one child--$36,995
- Single parents with more than one child--$38,646
- Two-parents with more than one child--$41,646
- Single persons without children--$12,880
- Couples without children--$15,880
The maximum federal credit that people are eligible for this year (Tax Year 2008) is:
- $4,824 with two or more children;
- $2,917 with one child;
- $438 with no children.
Note: These are the eligibility guidelines for tax year 2008 - the year that families are filing tax returns for now.
Get More Help to Apply!
The following Maine organizations have IRS trained and certified volunteers to provide free help with filling out tax forms. They also will
help with filing for the state and federal EIC. Call for an appointment or more information.
York County CA$H Campaign
207-324-5762 EXT 2718 OR
1-800-965-5762 Ext. 2718
Greater Portland CA$H Coalition
874-1000
Lewiston-Auburn Tax Credit
Awareness CA$H Coalition
207-513-3160
Western Maine CA$H Coalition
207-778-7954
Midcoast Maine CA$H Coalition
207-373-1140 EXT 275
Eastern Maine CA$H Coalition
CALL:211
American Association of Retired Persons (AARP)
Search online for a site near you
or call toll-free 1-866-554-5380
Get a complete listing of all free Maine help sites here
Read more about the Federal Earned Income
Credit
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