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  1. Continuing Our Efforts for Tax Credits and Economic Stability for Families

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    Virginia reached an important policy milestone this year — the General Assembly approved a state refund for a portion of the Earned Income Tax Credit (EITC) available to low-income working families. For the 2023 tax filings, families who qualify for the EITC will receive the refund on their federal taxes. At the state level, Virginia will give an additional refund equal to 15% of the federal refund.

    Tax refunds help families experiencing material hardship or poverty meet many of their basic needs and can be used as needed to pay off debts, pay rent or put food on the table. These refunds are especially impactful during times of inflation and when COVID response policies are starting to come to an end.

    Later this summer or early this fall families will also receive a one-time tax relief payment due to larger than expected revenue surpluses in the state budget. People with taxable income will receive a refund, but those who earn too little to owe taxes will not. And unlike the EITC, family size will not be factored into the payment—only marital status. These one-time refund plans fail to consider the additional expenses of feeding a larger family or child care needs for families with young children.

    What Could Be Next for Families?

    While this year marks an important step to provide more families with tax relief, it is helpful to take a step back and see where other states have built policies to support families. As most other states have wrapped up their legislative activity for the year, we can share how other states have designed tax refund policies that specifically support children and families.

    Recently ten states* have introduced legislation to create state-level child tax credits. Vermont is the most recent state to approve a child tax credit for families with children under five earning less than $125,000 per year. Vermont now joins the nine other states who have a child tax credit already in place for families (CaliforniaColorado, Idaho, Maine, MarylandMassachusettsNew Mexico, New York and Oklahoma).

    These states have provided a model that Virginia should consider. These are states who are governed by both Republicans and Democrats, but they have united behind state refunds to support families. Targeting refunds, in conjunction with the refundable EITC, impacts families’ economic security and lowers their level of hardship. Economic hardship is a main reason that children and parents experience trauma, depression, emotional distress. These negative outcomes mean economic hardship also puts children at risk of entering foster care. Additional state refunds can reduce these negative outcomes. Research on the federal child tax credit found that families used the additional funds to meet basic needs for food, utilities and clothing.

    By targeting tax credits to low-income families, these refunds can also reduce inequity. Black and Brown families make up the lowest income families in Virginia and experience disproportionate economic hardship. Choices to expand the EITC and to target Child Tax Credit can provide more financial resources to the families who have often been left behind.

    In the coming months, we anticipate waves of financial uncertainty for families dealing with higher gas prices, increasing rents, and universal free school meals coming to an end. If lawmakers provide additional savings and stability to communities facing uncertainty, our families would feel better about providing for their families and their children would feel more secure.

    We all want Virginia to be the best place to raise children and provide opportunities for them to grow up, but our tax policy is not in line with that belief. It’s time to join the other states in prioritizing children and families and offer targeted tax relief to families.

    *Connecticut, Hawaii, Illinois, Iowa, Kansas, Michigan, Missouri, Oregon, Vermont and West Virginia

  2. Easing Families’ Financial Burdens through Federal Response to COVID-19

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    On March 18, Congress passed the Families First Coronavirus Response Act, which provides relief to health care systems, additional paid sick leave, family leave and unemployment benefits.  

    On March 26, the Senate passed the CARES Stimulus package that provides economic stimulus payments to families and additional unemployment benefits. The House of Representatives is expected to vote on the bill on Friday, March 27th 

    Some key features of recent legislation that will impact families include: 

    • Cash payments to all tax filers: All families earning under $199,000 per year would receive a stimulus check or direct cash payment. These payments would be generated to all who filed taxes in 2018 as direct deposits.  

    Calculate what your family will likely receive: Washington Post Calculator 

    While this cash assistance is notable to alleviate immediate pressures and stimulate the economy, it is important to highlight , for example, that $1,200 will cover more expenses in Farmville than it will in Fairfax.   

    • Expanded paid sick days and paid family leave: The first federal response package included an expansion of federally mandated paid sick and family leave, which would apply to anyone ill due to Coronavirus, caring for family members, or caring for children when schools have closed due to Coronavirus. Full-time workers would get up to two weeks of paid leave, and part-time workers would get leave equal to the number of hours they work on average over a two-week period. Payments would be capped at $511 a day for those who are sick with the virus or seeking care, and $200 a day for those caring for a sick family member or children. 

    While these paid leave expansions are commendable, there are notable exceptions. Employers with fewer than 50 employees are exempt from these requirements.  

    • Expanded unemployment benefits: Federal and state officials have made adjustments to unemployment insurance procedures to help families. The CARES Act Stimulus bill expands unemployment insurance from three to four months, and it provides temporary unemployment compensation of $600 per week, which is in addition to and the same time as regular state and federal UI benefits. It also allows part-time, self-employed and gig economy workers to have access to unemployment benefits. The Governor has acted to fast-track response time and waive requirements around job search.  

    Anyone that has lost a job or experienced a reduction in wages should contact the Virginia Employment Commission, even if self-employed.  

    Additional resources are available for: 

    • Food/nutrition: to find free food distribution sites organized by local school districts and other community organizations, text FOOD or COMIDA to 877-877. For food assistance program eligibility information and to apply for the Supplemental Nutrition Assistance Program (SNAP), visit CommonHelp. If you are pregnant or are caring for a child under age 5, you may also be eligible for WIC. You can learn about WIC eligibility here and apply online here. 
    •  Child care and health insurance coverage: to determine if you are eligible for financial assistance for child care and health insurance coverage through Medicaid or FAMIS visit CommonHelp.