Enacting Refundable State EITC Is Important for Women

By Sheronn Harris, Georgia Women’s Policy Institute Fellow

Enacting a Refundable State EITC Important for Women, Georgia Families and Communities

Since the summer of 2016, the Fellows of the YWCA Georgia Women’s Policy Institute have been actively advocating for tax reform in support of the YWCA’s mission to eliminate racism, empower women, stand up for social justice, help families, and strengthen communities.  Below is more information on the Fellows’ chosen policy project – enacting a refundable state Earned Income Tax Credit (EITC).

What is the EITC?

The federal EITC is a refundable tax credit. Its purpose is to benefit individuals and families, specifically working taxpayers, who are within designated low to moderate income thresholds.  The amount of EITC benefit a person receives depends on factors such as income and family size; however, the most benefit is to individuals or couples with children.

EITC was first enacted on the federal level in the early 1970’s when it was signed into law by President Gerald Ford. It was later substantially expanded by President Ronald Reagan, who deemed it “the best pro-family, the best job creation measure to come out of Congress.”

How is a state EITC different?

As of the date of this blog post, 26 states and Washington DC have enacted a state level EITC. Where EITC is a tax credit against federal income taxes, a state EITC is a tax credit against state and local taxes. There are two bills recently introduced in this year’s Georgia legislative session pertaining to a state ETIC – House Bill 329 and Senate Bill 172.

How does a state EITC benefit Georgia women?

A state EITC impacts women and families at every stage of life.  Studies from the Center on Budget and Policy Priorities show that EITC has a positive impact on infants, expecting mothers, K-12 children, students’ college performance, and retired seniors. EITC is particularly important for women, who are disproportionately Georgia’s lowest wage earners. Because a state EITC is designed to reward work, its enactment will support over a million Georgia families and better position women and families for economic growth.

What is refundability?

The benefit of EITC is maximized when it includes a provision for refundability.  Like the federal benefit, a refundable state option provides that if there is a portion of the credit that is left over after being applied to current income taxes due, that amount is refunded to the taxpayer. Early research has shown that a state EITC with a refundable option would put millions of dollars back into circulation in Georgia’s economy, allowing families to afford basic needs such as childcare, transportation, home repair, and continued education.

What can we do?

You have an opportunity to make an impact. While the two proposed bills are currently making their way through the Georgia legislative process, here is how you can take action.

  • First, follow the issues to ensure that a state EITC is enacted in a way that will best support Georgia families. For example, a refundable option would have the greatest impact on women, children, families and the community.
  • Second, call or write a personal letter or email to your legislator and ask that they support a state level EITC with refundability.
  • Third, visit your legislator and ask that they support Georgia’s women and families through a state level EITC with a refundable option. This is even more effective than calling.
  • Fourth, find out whether organizations you support and/or are already a member of currently support EITC and join them—there is strength in numbers. There are several leading Georgia organizations that support or have EITC as part of their legislative agendas such as the YWCA of Greater Atlanta, Atlanta Community Food Bank, Families First, and Georgia Watch.
  • Finally, spread the word. Tell a friend, family member, co-worker or stranger how EITC supports working women and families, and ask them to join you in taking action.

Sheronn Harris is a Georgia attorney and the owner of The Harris Firm, P.C. She serves as a Fellow for the Georgia Women’s Policy Institute, the signature advocacy program of the YWCA of Greater Atlanta.