Mom’s juggling act hurt by EITC cut

Added March 27th, 2013 by Judy Putnam | Email This Entry Email This Entry
Judy Putnam

Shannan Mills does a lot of juggling. With three daughters and three jobs, the 34-year-old divorced mom from Fowlerville is on the move constantly trying to make sure her daughters’ needs are met.

Shannan Mills

She said she was surprised and disappointed when she received only $100 from the Michigan Earned Income Tax Credit this year.

In 2011, Gov. Rick Snyder and a majority of lawmakers voted to cut the EITC from 20% of the similarly named federal credit to just 6% to pay for a dramatic drop in the state’s corporate income tax.

The big tax shift from businesses to individuals is just hitting home now as taxes are filed for the 2012 tax year.

Under the reduced EITC, Mills saw her credit drop from about $330 to $100.

“I was really shocked it was cut so much,’’ Mills said.

Mills has a house cleaning business, does lunchroom duty at elementary, middle and high schools, and works part-time at a retail store specializing in luxury bath items. In all, she earns about $26,000 a year.

She and her daughters, ages 10, 13 and 14, recently moved from her parents’ home into a fixer-upper that she rehabbed herself with the help of friends. She said the EITC is an important tool to keep up with basic needs of her family.

“I didn’t think that was wise for them to do that,’’ she said about the cut in the state EITC.  “People really need that money. For us each year, it’s catching up on past bills.’’

Under a proposal announced by House Democrats Monday, the EITC would be raised to 11% of the federal credit. That’s a step in the right direction for Mills and other families around the state.

Rob Burgess

Rob Burgess is a retired CPA and Lakeshore Public Schools administrator. He runs the Volunteer Income Tax Assistance site in Benton Harbor. He said many of the clients seeking free tax assistance make between $16,000 to $20,000.

Those with children have been dramatically impacted by the reduced state EITC, losing about $200 per family.

“We’ve done everything we can to make sure their taxes are calculated correctly. We’ve had some instances where they’ve become quite emotional,’’ Burgess said while taking a break from helping clients this week. “Two hundred bucks is a lot of money.’’

Burgess said a frequent use of the tax refund for his clients is to pay property tax bills and to catch up on overdue utility bills.

For more information on the EITC, go to www.saveoureitc.com.

Do you have a story to tell about how the EITC changes are impacting your life? Please contact me at jputnam@mlpp.org.

— Judy Putnam

 

2 Responses to “Mom’s juggling act hurt by EITC cut”

  1. […] >> Read more.  Share this to help spread the word about saving our EITC!FacebookPrintEmailTwitterLike this:Like Loading… from → Uncategorized ← Jacobs: Restoring state EITC to 11 percent is ‘good first step’ […]

  2. […] Democrats in the Michigan House of Representatives are planning to introduce a number of bills to support the middle class, including one to restore the state EITC to 11 percent of the federal credit, and another to restore the Homestead Property Tax Credit, a property tax circuit breaker; both would benefit low-income families as well. Additionally, twenty municipal leaders from across Michigan joined together this week to call on Gov. Rick Snyder and the Legislature to stop shifting resources away from low- and middle-class families through tax hikes and cuts to important programs like the EITC, causing local communities to suffer. Michigan League for Public Policy personalized this issue by highlighting the story of Shannan, a single working mother of three who will receive a much smaller state EITC this year after the credit was cut from 20 percent to 6 percent of the federal credit.  (Detroit Free Press, Michigan Radio Network, The Lansing State Journal, Michigan League for Public Policy) […]

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