In recognition of the vital work done by family caregivers, the Economic Security Project (ESP) aims to benefit from the reimbursement of the cost of living, an extension of the tax credit for earned income (EITC). Among other changes to the EITC, reimbursement of the cost of living would extend to benefits for family caregivers who have little or no employment income, substantially expanding the types of work eligible for tax benefits. It is estimated that the provisions of the custodian proposal would increase tax benefits for 2.6 million households this year, 2020. The benefits of caregiver care would be highly concentrated among low-income families.
Think of someone you know who cares about someone else. It may be a husband or wife who has left their job to care for a sick couple or a young father who is leaving the job market to raise their newborn. It can be an adult working all day to help an elderly parent. Whatever the type of service or who offers it, there is a common denominator: these people work but are not paid.
This does not mean that it is not essential for the economy. It's precisely the opposite: the AARP Institute for Public Policy estimated that in 2013, the value of unpaid care was around $ 470 billion, often since people who are volunteering to provide care to loved ones helps build confidence in public programs services, such as Medicaid, or services such as not-for-profit home care or food aid.
But caregivers are economically overlooked, especially when it comes to accessing federal government support. Although circumstances vary by state, it is often a necessary condition for people to obtain benefits, such as meal vouchers or housing assistance, to receive wages, or to seek employment actively. In general, people have to work and earn money for at least ten years to collect Social Security benefits. The income tax credit is one of the most popular and effective poverty reduction programs in the country, providing approximately $ 6,000 per family per year to low-income families in the form of a tax credit. But you must have an income before you can get it.
Such policies are designed to encourage people to work and contribute to the economy. But ignore the fact that unpaid work itself contributes to the economy. Part of the reason it is not generally seen in politics. For a long time, it was the rule for women to carry out activities such as free home care.
But it is starting to change. Many recent policy proposals called for home care to be recognized as an economically significant workforce. They included as a job class that makes a person eligible for a tax credit. The economic security project, led by Chris Hughes, Dorian Warren, and Natalie Foster, proposes a complete extension of the EITC, which they call "cost of living refund."
ESP also supports the work of Bonnie Watson Coleman of New Jersey, who introduced the 2018 EITC Modernization Law to increase the amount of money people can get by credit and to expand eligibility to more people. The main ones in the latter category are caregivers, who usually have to cut down on paid work or stop supporting someone else altogether. "This project is beginning to recognize that neglected and often unhappy nursing work is essential to our society," said Watson Coleman in a statement. His plan would also extend student credit, of which about three million in the United States are struggling financially while trying to complete their college education. And that would give people the ability to receive monthly payments, rather than one go, to help people throughout the year. Similar changes are also happening in California: ESP has asked the state to expand its EITC and move to a monthly payment facility, as does Gavin Newsom, and CALPIRG has worked with MP Buffy Wicks to propose a law project which would broaden the definition of work includes caretaker.
Although the modernization and expansion of the EITC are becoming a viable political path to meet the economic needs of the self-employed, it is not the only one.
Advanced Accounting & Tax Planning