By Jill Winsor
Tax season provides a great opportunity for families with low and moderate incomes to improve their financial well-being. The Earned Income Tax Credit (EITC) is an incredible tool that helps put money back into the pockets of working families who need it most. In Oregon, far too many eligible families aren’t taking advantage of this opportunity.
The EITC helps families shore up their earnings throughout the year, and then provides a substantial refund that can be used to build assets. Families can save for a rainy day, a car to get to work, or college. The EITC makes saving for the future possible for workers with low and moderate wages. Many recipients use the EITC to pay off debts, another way to allow them to begin building assets. Because it is targeted at families with children, the EITC has intergenerational and lifelong benefits by strengthening economic security for working families.
Despite these many benefits, the EITC is significantly underutilized in Oregon, meaning families and children are missing out on an essential economic boost. Oregon’s EITC usage is among the worst in the country and the Oregon Center for Public Policy has estimated that about one in four eligible families did not claim the credit in 2013, collectively leaving $130 million on the table. In 2017, the Oregon Legislature responded with SB 398, which added language to W2 forms providing employees with information about the EITC and how to determine their eligibility. We look forward to seeing how this awareness-raising effort increases uptake of the EITC.
We will continue to work with our partners and legislators to find other policy solutions to improve uptake of the EITC. This tax season, we will work with our wide network of financial capability service providers to make sure that more Oregonians take advantage of this asset building opportunity. If you know someone who needs help filing their taxes, make sure to send them to our partners at CASH Oregon who maintain a list of all of the free tax preparation sites across the state.