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Veterans could lose tax credit

Nancy Marshall-Genzer Nov 11, 2015

Veterans could lose tax credit

Nancy Marshall-Genzer Nov 11, 2015

At lunchtime on a recent day at Park View Elementary School in Salt Lake City, Paul Johnson is trying to keep squirming kindergarteners and first graders in their seats.  Not an easy task, even for someone who was in the  Army for almost three years.

Johnson works part-time, 29.5 hours a week, as monitor in the school’s computer lab. He gets both the Earned Income Tax Credit and Child Tax Credit, which added up to almost $8,000 for him last year. Johnson and his ex-wife spent the money on their four kids.

“You know, buy extra things that the kids might need,” Johnson said, before pausing to cough. 

That cough is part of Johnson’s disability. His doctor thinks he froze parts of his lungs during the year he spent in Turkey as a private first class in the Army.

“On a really cold day I might have frozen some of my lungs and burnt them,” Johnson said. “Because it was so cold and we were out exercising.”

The Earned Income Tax Credit, which is a sort of wage subsidy based on how much you earn, was designed for the working poor — a category that includes some veterans and active-duty military members. 

“So roughly 2 million veteran and active duty – and most of them are veterans – qualify for either the Earned Income Tax Credit or the low income Child Tax Credit,” said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.  

Congress made some changes in 2012, making it easier to qualify for the tax credits. Congress allowed people who make as little as $3,000 to qualify for the Child Tax Credit.  And eased a marriage penalty in the Earned Income Tax Credit, while allowing a larger credit for families with three or more children.

But those adjustments are set to expire in 2017, which would leave many veterans out of luck.

“If they went away, a million veteran and active duty personnel would be hurt by that, would lose income,” Marr said. 

Marr wants Congress to renew the tax credit adjustments by the end of this year.

So does Kelly Hruska, the government relations director for the National Military Family Association. It’s contacting military families, trying to get them involved in a campaign to save the tax credit adjustments. Hruska said many of them were surprised to learn the adjustments weren’t permanent.

“Then we say, ‘What are you going to do when, if it expires?'” she said. “And they’ve come back and gone, ‘What?  It’s expiring?’”

Johnson knows the adjustments are expiring, and he wants Congress to do something about it.

“I’m kind of frustrated with Congress right now because it seems to me that they’re trying to fix things that aren’t broke,” he said.

Editor’s Note: An earlier version of this story used imprecise language to describe the changes Congress made in 2012. The copy has been updated.

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