ABOUT


The Coalition

The Healthy Families Tax Credits Coalition is a statewide nonpartisan network of advocates working to improve the health and well-being of Massachusetts children and families by expanding the state Earned Income Tax Credit (EITC) and passing a robust and inclusive Child and Family Tax Credit (CFTC). Our growing coalition is led by Children’s HealthWatch at Boston Medical Center and consists of community-based agencies, legal advocates, researchers, professional associations, social service providers, tax preparers, health providers, and Massachusetts workers and their families. A list of partnership and supporting organizations of the Healthy Families Tax Credits Coalition can be found at the bottom of this page under the “supporting organizations” section.

Formerly known as the Healthy Families EITC Coalition, since 2015 our network has successfully advocated to increase the state EITC, expand eligibility to survivors of domestic violence and abandoned spouses, and invest over $1.5 million annually to support the Volunteer Income Tax Assistance (VITA) program.

Policy Priorities

Increase the Massachusetts Earned Income Tax Credit (EITC) from 30% to 50% of the value of federal EITC.
Raising the MA EITC match rate would increase financial resources for working families with low incomes, improving economic stability and children’s health.

Extend eligibility for the EITC to immigrants who file taxes with an Individual Tax Identification Number (ITIN).
Despite paying taxes, immigrant workers who file taxes with an ITIN are excluded from claiming the EITC. These families have also been left out of federal relief throughout the pandemic, and have limited access to public benefits.

Establish a robust Child and Family Tax Credit (CFTC) that supports all children by combining the existing Household Dependent Tax Credit and Dependent Care Tax Credit into a single credit (a CFTC), increasing the value to at least $600/dependent, and removing dependent age limits.
Under current law, families must choose between two dependent credits: the Household Dependent Tax Credit (HDTC) and Dependent Care Tax Credit (DCTC). Families who claim the DCTC can receive up to 25% more than families receiving the HDTC if they have qualified child care expenses. This penalizes families who rely on other care arrangements, such as stay-at-home parents and extended family members, as well as families with low incomes who may be using subsidized care. Furthermore, the dependent credits are currently only available for children under age 12 and 13 (respectively), leaving out older children and other dependents. Streamlining the credits into a single CFTC, equalizing their value, and removing the dependent age limits would simplify this process for families and provide them with a more generous credit to meet their entire household’s needs.

Remove the large family penalty from both the EITC and new Child and Family Tax Credit.
Currently the EITC and dependent credits increase with family size, but only up to three children or two dependents, respectively. Holding all else equal, a family with two children will receive the same credit as a family with four children. This unfairly penalizes larger families and is entrenched in racist tropes that assume that families will have more children in order to gain a slightly higher tax credit.

Improve access to the EITC through sustained funding for the Volunteer Income Tax Assistance (VITA) program and a robust communications and outreach campaign.
In Massachusetts, 20% of families eligible for the EITC do not claim the credit. This rate is likely higher for state dependent credits, which – similar to the 2021 federal Child Tax Credit – recently became fully refundable and available to families without tax filing obligations. Sustained VITA funding and a widely disseminated outreach and communication campaign on refundable tax credits and the availability of VITA sites to assist families with low and moderate incomes would ensure that more households receive the credit. It would also protect families from for-profit tax preparers’ often exorbitant fees to claim the EITC and CFTC.

Earned Income Tax Credit (EITC)

The EITC is a benefit for working individuals and families with low to moderate income that reduces the amount of taxes they owe and may even provide them with a refund. It is a tax policy critical in reducing the financial burden of low-income families and has the potential to decrease food insecurity and increase health through shifting income towards spending on healthy meals and necessary medical care.

Child and Family Tax Credit (CFTC)

Under current law, the Household Dependent Tax Credit and Dependent Care Tax Credit are already available to the majority of families with eligible dependents, including those with no earned income and immigrants who file taxes with an ITIN. This existing structure is significant, as it supports families who are often left out of policies and for whom a fully refundable tax benefit may have the greatest, anti-poverty impact. Massachusetts has the opportunity to expand this impact and step up as a leader for families in children, especially as Congress has failed to reinstate the 2021 expanded Child Tax Credit – an expansion that reduced child poverty nationwide by 46%.

Volunteer Income Tax Assistance (VITA) Sites

The VITA program offers free tax help to people who generally make $60,000 or less, persons with disabilities, the elderly and limited English speaking taxpayers who need assistance in preparing their own tax returns. Often located at community-based organization, IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. VITA sites also offer financial education and connect families with low incomes to other critical services, strengthening families and the local economy. VITA sites are a low-cost and high return activity offering an up to 60 to 1 return on investment. In a typical year, over 30,000 individuals are served by the 80 existing VITA sites across Massachusetts, and the services that sites provide results in $60 million in tax credits for taxpayers. Increasing awareness of these programs and increasing state funding will expand the capacity and reach of this essential and evidence-based program.

THE EVIDENCE


Earned Income Tax Credit (EITC)

Child and Family Tax Credit (CFTC)

The American Rescue Plan Act of 2021 temporarily expanded the value of the federal Child Tax Credit (CTC) and – mirroring the structure of the existing MA dependent credits – made the credit fully refundable and available to families with no earned income. This change was transformational. Advance monthly payments helped families pay for food, rent, transportation, child care and other necessities as well as education and enrichment activities for their children. Child poverty was reduced by 46 percent. Research from Children’s HealthWatch found that the advance CTC helped families catch up on rent and improved health. Though not offered in advance periodic payments, this research may demonstrate the impact that a robust state Child and Family Tax Credit may have in Massachusetts.

ACCOMPLISHMENTS


2022

  • The Massachusetts House and Senate unanimously advance an Economic Development package to 1) increase the state EITC from 30% to 40% of the federal credit; 2) combines the Household Dependent Tax Credit (HDTC) and Dependent Care Tax Credit (DCTC) into a single family credit and increases its value to $310/dependent.
    • While deeply disappointed that tax relief was ultimately stripped from the final economic development legislation, the Healthy Families Tax Credits Coalition is encouraged that the Legislature will return to these critical expansions in the new session. Read our statement.
  • Governor Baker and the Massachusetts Legislature approve the FY2023 budget, raising funding for the VITA program to $1.5 million.

2021

  • Governor Baker and the Massachusetts Legislature approve the FY2022 budget, raising funding for the VITA program to $1.02 million.

2020

  • Governor Baker and the Massachusetts legislature approve the FY2021 budget, raising funding for VITA sites and operations to $820,000.

2019

  • Governor Baker and the Massachusetts Legislature approve the FY2020 budget, including for the first time funding for VITA sites and operations at $200,000.

2018

  • Governor Baker and the Massachusetts Legislature approve the FY2019 budget, increasing the state EITC from 23 percent to 30 percent of the federal credit.

2017

  • Governor Baker and the Massachusetts Legislature approve the FY2018 budget, expanding the EITC to survivors of domestic violence and abandoned spouses by establishing a new tax filing status (married filing separately).

2015

  • August 5th, 2015: Governor Baker signs a law, increasing the state EITC from 15% to 23% of the federal credit.

IN THE NEWS


TESTIMONY AND STATEMENTS


The Healthy Families Tax Credits Coalition has submitted the following statements and written testimony to the Legislature:

  • Letter to the incoming Healey-Driscoll Administration on coalition priorities and permanent tax relief for families with low incomes.
  • Statement on the removal of permanent tax relief  for families with low incomes from the final economic development legislation.
  • Statement on MA tax relief legislation.
  • Written Testimony to the MA Joint Committee on Revenue on H.4361 (An Act to improve Massachusetts’ competitiveness and reduce the cost of living).
  • Written Testimony to the FY23 Conference Committee and leadership in support of the House level of VITA funding ($1.5M).
  • Written Testimony to the MA Joint Committee on Revenue in support of H.2871/S.1841 (An Act to increase family stabilization through the Earned Income Tax Credit) and S.1852 (An Act providing a guaranteed minimum income to all Massachusetts families)
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