BOSTON — The Massachusetts Nonprofit Network (MNN) recently released a new edition of its Commonwealth Insights publication series. The report, “Doing More Good: Making the Most of the Earned Income Tax Credit (EITC),” details the lifeline for low-income families that is the EITC and the gap between those eligible for this credit and those claiming it. With less than a month to go before the tax-filing deadline, MNN is calling on nonprofits across the state to help spread awareness and increase access to the EITC.
The report indicates that, each year, more than 100,000 Massachusetts residents who are eligible for the EITC do not claim the credit. The report also reveals that one in three children in Massachusetts lives in an EITC-eligible household.
“We found that while many organizations across Massachusetts are doing great work to help people with their taxes, there continues to be an awareness gap among those who would most benefit from this credit,” said Jim Klocke, CEO of MNN. “An estimated $200 million goes unclaimed by Massachusetts residents each year. This is money that would otherwise help working families put food on the table, pay down debt, and pay the bills. We believe that, with one month to go before the filing deadline, there is an opportunity for nonprofits across the state to connect their constituents to this important resource.”
The federal and state EITCs provide a supplement to the income of low-wage workers. The EITC is a refundable tax credit, so recipients benefit from it even if they have no tax liability. The amount of the credit depends on the claimant’s marital status, income earned during the tax year, and number of dependent children. In 2015, more than 26 million eligible workers received more than $67 billion from the federal EITC program. In 1997, Massachusetts enacted a state EITC match at 16% of the federal EITC. In 2016, the state match was increased from 16% to 23% of the federal EITC.
This report is the first edition of MNN’s Commonwealth Insights publication series of 2017. The series launched in 2016 and seeks to cover timely issues pertinent to the nonprofit sector. The publication is funded by the Barr Foundation.