While we celebrated Labor Day with a family cookout or one last summer trip, let’s remember that this holiday embodies the idea that hard-working Americans make our economy stronger and prosperous. Let’s also remind ourselves that Texas millennials (ages 16-35), a generation that was coming of age during the worst economic crisis since the Great Depression, deserve a fair shot at succeeding in the economy.
Raised to believe that getting ahead was a result of working hard and making the right decisions, millennials are living in a more difficult economy than the one their parents had. Whether they are working as teacher’s aides helping our kids learn or nurses making sure we lead healthy lives, they deserve to have the comfort of a home, reliable transportation, and enough money to make ends meet. Unfortunately, roughly 70 percent of Texas millennials with income make under $30,000, compared to 52 percent of the entire Texas working population. That is why we need programs in place to help millennials succeed.
Two main tax credit programs critical to the economic security of roughly 14 million millennials are the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). Both credits are refundable, meaning if the amount of taxes owed is less than $0, a refund of that amount will be issued. During tax time, Texas millennials can maximize their tax refund and climb the economic ladder by saving some of their refund in a savings account or purchasing a savings bond when filing their taxes. These savings could help millennials build assets that increase their economic security, such as making a down payment for a home or investing in additional schooling.
There are some slight differences between the programs. The EITC is available to workers between 25 and 65, who meet a certain income threshold. The CTC, meanwhile, is available to families with children under the age of 17. Millennials who meet both criteria are eligible to receive both benefits. In fact, over 1.4 million Texas millennials benefit from the EITC and/or CTC.
Research shows the many proven benefits of EITC and CTC, from recipients leading healthier lives to the children of recipients doing better in school. These tax credits also help grow our economy, since each family will have more money to purchase things like groceries, clothes, and other goods.
Federal policymakers interested in strengthening opportunities for millennials and young families can improve the impact of EITC and CTC in two ways:
1. Extend key provisions. Congress should save key provisions of these programs that are set to expire at the end of 2017. If they do not extend these provisions, over 755,000 Texas millennials will lose their benefits and have a greater risk of falling deeper into debt or remaining in poverty.
2. Expand the age threshold to include workers aged 21 to 25. Currently, only workers between the ages of 25 and 65 are eligible for these tax credits. Expanding the age range helps roughly 8.6 million millennials nationwide create a stronger economic foothold
As we celebrate the hard work of Texans past and present, we must recognize that our economy depends on the success of the millennial generation. Both the EITC and CTC help millennials launch their careers and take care of their families. With building more financial security at a time when economic success is harder to attain than in past generations, millennials are setting themselves up for success.