How Tax Credits Can Help Domestic Violence Survivors
This is part of an ongoing series “Help More Domestic Violence Survivors Survive By”.
Domestic violence (DV) occurs across the socio-economic spectrum, but low-income survivors face unique challenges and barriers to ending an abusive relationship. Leaving an abusive partner may mean that a survivor loses access to their income, shared housing, employment, health care, and more. DV may also result in survivors falling into poverty despite not previously being considered low income due to medical, legal, relocation, transportation, or child care costs. In some cases, a survivor may be even more vulnerable because their partner has exerted control over assets and finances.
Below are some resources that can help return financial stability to survivors and their families.
Refundable tax credits can improve a survivor’s economic security
Refundable tax credits like the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) can keep families out of poverty and improve children’s health and education outcomes. Refunds from refundable tax credits can provide much-needed economic support for survivors that allows them to open a bank account, put down a security deposit, or meet other pressing needs to help them leave an abusive relationship.
The refunds from these family tax credits can be substantial, especially for survivors with children. For tax year 2018, the refundable EITC is worth a maximum of $6,431 (depending on income and the size of the family), and the EITC Assistant helps determine eligibility for EITC. (And some states offer their own EITCs based on the federal credit.) In addition, the CTC is worth up to $2,000 per child (refundable up to $1,400) for tax year 2018.
Here’s one story a local survivor program shared about a survivor who benefited from the EITC:
When Susanna implemented a plan to keep herself and her children safe from her abuser, she incurred debt for an emergency stay in a hotel and basic living expenses after being cut off from a joint account. At tax-time Susanna accessed a local Volunteer Income Tax Assistance (VITA) site, where a trained volunteer told her that because she worked in 2013 and had two young children, she was eligible for the Earned Income Tax Credit. The EITC allowed her to pay off the $700 of debt she had on a high interest credit card, start an emergency savings account, and enroll in an Individual Development Account Program. The EITC provided an opportunity for this family to create safety, stability, and most importantly, a pathway out of poverty.
Existing tax resources for survivors
With April 15 fast approaching, survivors and advocates for survivors should be aware of federal tax credits like these – as well as free tax preparation services, tax clinics that offer counsel to low income clients, and resources that are available for survivors (like address confidentiality and innocent spouse relief).
New tax legislation with key provisions for survivors
On April 10, Senators Sherrod Brown, Michael Bennet, Dick Durbin, and Ron Wyden introduced the Working Families Tax Relief Act of 2019, which would strengthen the EITC for working families with children and working people without children at home, ensure that millions of children aren’t left out of the CTC, and boost the CTC for families with very young children. In fact, the bill would help make more than 46 million households more financially secure, benefiting more than 114 million people. This bill also provides much needed tax relief for Puerto Rico. If enacted, it would benefit millions of low- and middle-income women of all races.
Under the Working Families Tax Relief Act, a survivor with two kids who leaves her abuser and earns $20,000 a year could get a $3,700 boost from the improved EITC and CTC. A survivor without any dependents making the federal minimum wage ($14,500 a year) would get an EITC increase of about $1,530. That’s more money to pay for basic necessities, such as home repairs, maintaining a car to get to work, training, or paying down debt incurred after leaving an abuser.
Our tax system leaves hardworking women and families by the wayside, and the 2017 tax law doubled down on its flaws, delivering massive tax cuts to the wealthy and big corporations and failing to make tax changes that would make a real difference for women, children, and families. The Working Families Tax Relief Act is a critical step toward fixing the glaring flaws with the 2017 tax law and making the tax code work for survivors and their families.