What do you think about when you think about tax season? Hours spent in front of a computer screen? The anxiety that surrounds not knowing how much you will owe? Whether you’ll get a tax refund?

One of us is a recent college graduate who has filed her own taxes for the past six years. Even with my personal experience of filing my return, though, I now have a whole new view on taxes after working as a tax preparer at the Capital Area CA$H Coalition.

During this past tax season, we both were able to see how large an impact the Earned Income Tax Credit has in the lives of low-income working Maine families. Now when we think about taxes, we see the potential for opportunity.

According to its website, the 50 nonprofit and for-profit partners of CA$H Maine work together to help low- and moderate-income Mainers by offering free tax preparation to qualified filers during the tax season, and connecting residents to financial education resources, including money management and home buying workshops, Family Development Accounts and credit counseling.

Through this program, we volunteers see firsthand how the Earned Income Tax Credit can make a difference in the lives of Maine families who are most at risk. However, 20 percent of those eligible for the credit don’t claim it, perhaps because they are unaware of its existence.

Earned Income Tax Credit is a program that is run on both the state and federal level that gives a certain percentage of working poor families’ income back to them in the form of a tax return or refund. The federal Earned Income Tax Credit was established in 1975 to reduce the amount of taxes owed by working families that qualify. The federal EITC is refundable if the tax amount owed is less than the credit itself. In 2014, almost 98,000 EITC-eligible tax returns were filed in Maine, generating nearly $200 million in tax credits for Maine workers.


While the federal EITC does help the people of Maine, our state Earned Income Tax Credit is not as effective as it could be. Maine’s credit currently is just 5 percent of the federal credit and is nonrefundable, which means that the money families get from EITC can be used only to pay taxes that they owe, and they will not receive any money back into their accounts. Of the 25 states that currently have a state-funded Earned Income Tax Credit, Maine is one of just four that does not have a refundable EITC.

A refundable credit would allow for more money to go back into impoverished communities. It is important that the state Legislature act now because Gov. Paul LePage’s budget plan for Maine cuts EITC entirely; taking away money from those who need it most.

Research has shown that the EITC helps working families make ends meet, reduces poverty, keeps money in our local communities and makes a huge difference in the lives of low-income children. It also is one of the most effective ways to reduce poverty while also encouraging people to work.

This is why we urge the Legislature to vote to make our state EITC refundable and to increase the rate to 20 percent. Three bills before the Legislature focus on the Maine Earned Income Tax Credit: L.D. 96, L.D. 648 and L.D. 963.

For 40 years, the federal EITC has received broad bipartisan support as an effective anti-poverty work incentive program.

We have the opportunity to make sure Maine’s Earned Income Tax Credit is just as beneficial. Based on our experience helping people file their taxes, we can affirm that making the Earned Income Tax Credit refundable and raising the rate would be a huge step forward for working families in our state.

As Joel Johnson of the Maine Center for Economic Policy states in a recent report: “These changes to the state’s EITC would be one of the most efficient and cost-effective ways to reward work and reduce poverty among working Maine families.”

Alyra Donisvitch, of Manchester, was a volunteer tax preparer at the Capital Area CA$H Coalition. Lydia Nicholson, of Durham, N.C., is a third-year student at Colby College, Waterville, majoring in American Studies. She volunteered at the CA$H tax prep site at the University of Maine at Augusta.

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