Strengthening the safety net for working families

For millions of families across New York state, having to make near-impossible financial choices — like choosing between putting food on the table or paying the utility bill — is a daily reality. A Raising NY analysis found that despite consistently ranking in the top five states in the nation for its per-capita income and GDP, New York is ranked in the bottom third of the entire country for its high rate of child poverty. The need is particularly great in working-class neighborhoods, where families of color and immigrant families are battling uphill against wage gaps, hiring discrimination, and more just to make ends meet.

The federal extended tax credit was a life-saver for so many families across the country: 2.9 million children were lifted out of poverty, and the national rate of child poverty was driven to a record low in 2021. Now, with the credit gone, New York’s working families are back to accessing only a partially refundable credit at a fraction of the maximum credit level they’d had previously, and it is paid out on an annual, not monthly, basis.

But New York has historically led the way when the federal government fails to act, and here we have the chance to do that once more.

That’s why the three of us have introduced the Working Families Tax Credit (S9610/ A02464), which would provide every single family in the state with direct cash assistance of up to $1,500 per child, paid out quarterly, giving working- and middle-class families a necessary safety net to help meet their basic needs.

The Working Families Tax Credit would consolidate the state’s Empire State Child Tax Credit and the Earned Income Tax Credit into one, making both credits more efficient and expanding eligibility to more families. It eliminates the exclusion

of children from birth to age 4, includes all families regardless of immigration status, and eliminates the income phasein, providing those with the lowest income the largest credit. Along with increasing the maximum value of the credit to $1,500 per child, our proposal would guarantee that every family receives a minimum $500 credit regardless of income.

New York families would, on average, receive $1,090 more than they currently get, reducing the poverty level by nearly 20 percent for New York’s most at-risk children.

Currently, a single parent of three earning $20,000 per year receives a Child Tax Credit of $990 and an Earned Income Tax Credit of $1,989. Under our proposal, this family would see a boost of $1,521 to $4,500. And the help families receive wouldn’t just come once a year, at tax time: It would be once a quarter, just in time for new school books or payment on a car. Families could budget for it, instead of just hoping that a windfall each year means they can make it through the next twelve months.

Under every possible household income and family size configuration, families in New York would do better with the Working Families Tax Credit than with the status quo.

According to the Settlement House American Rescue Plan Impact Study, more than 90 percent of New York respondents spent their child tax credit funds on basic necessities such as food, clothing, rent, utilities, school supplies, or school tuition. Enacting the Working Families Tax Credit now would mean that families could address their costs of living when, how, and where they need it most. This would truly be a game-changer for working families across our state.

For New York parents experiencing deep financial precarity, our Working Families Tax Credit could unlock a world of possibility — and for their children, the impacts of this tax credit could be life-changing. And what is a government for, if not to change lives for the better.