As tax season continues, several CMF members and partner organizations are encouraging Michigan families to take advantage of tax break programs like the Michigan Earned Income Tax Credit (EITC) and the expanded Child Care Tax Credit (CTC).

CMF, along with our partners at the Michigan League for Public Policy (MLPP) have supported expanding the Michigan EITC to 30%. 

The state EITC and CTC programs mean working parents can use more of their take-home pay to meet their children’s needs.

Michigan Earned Income Tax Credit

The EITC is a bipartisan, refundable tax break for working families offered at the federal and state level. 

Michigan has one of the lowest percentages based on the federal credit at 6%. It was once 20% but was lowered in 2011. 

According to the MLPP in the tax year 2019, about 738,380 families statewide received an average credit of $150, putting more than $110 million back into local economies.

CMF is partnering with MLPP and others in supporting the increase of the state EITC to 30%, which would mean an average credit of $749 for families. CMF recently signed on to an EITC support statement.

CMF has partnered with MLPP in the past, which has advocated for several years to increase the EITC. 

“The Michigan EITC is a win-win investment that resonates in all counties and political districts, benefits rural and urban residents, and supports families while getting spent at our small businesses and in our local communities,” Monique Stanton, president and CEO of MLPP said. 

Governor Gretchen Whitmer proposed an increase from the current 6% to its original amount of 20% in her 2022 State of the State Address. Increasing the EITC would deliver an average combined federal and state tax refund of $3,000 to 730,000 Michiganders. 

Child Care Tax Credit

Another key tax credit for working families with children helps provide support for child care costs.

According to Kids Count Data Center, Michigan had 19.5% of children ages 0 to 17 living below the poverty line. The goal of the CTC is to help reduce child poverty and assist families who earn lower wages.

Families with children under the age of 18 were eligible for monthly cash payments that began in July 2021 through the expanded CTC and must file taxes in 2022 to receive the second half of their credit.

Several CMF members and partner organizations are encouraging families to take advantage of the expanded CTC program. 

The Kresge Foundation, W.K. Kellogg Foundation, The Skillman Foundation and Ballmer Group formed a cross-sectoral coalition to support the access of the CTC. 

The Detroit Child Tax Credit campaign has reached over 200,000 families so far with grassroots-led and neighborhood-based outreach. 

“More than 30 neighborhood-based organizations were coordinated and provided with resources to conduct individualized outreach to families through phone banking, canvassing, and virtual and in-person events, to share information and support families to access the Child Tax Credit,” Wendy Lewis Jackson, managing director, Detroit program at The Kresge Foundation said in a press release. 

The campaign has directly connected with 5,000 families with targeted outreach and has completed taxes for over 3,500 families.

The coalition encourages the philanthropic community, local and national partners and state and federal leaders to consider these efforts to ensure all families have access to federal resources. 

“It is only through these coordinated efforts that we can truly expand and sustain efforts to support children and families. We must find ways to help families take advantage of public resources in order to sustain and scale impact in the communities that we serve, and we must also support our families to improve their economic mobility through financial literacy and access to needed resources,” Kylee Mitchell Wells, executive director, Southeast Michigan at Ballmer Group said. 

Want more?

The Michigan League for Public Policy developed fact sheets outlining what restoring or expanding the EITC would mean statewide and at the county level. 

Read more about the Detroit Child Tax Credit campaign.