The Annie E. Casey Foundation (AECF®) is devoted to developing a brighter future for millions of children at risk of poor educational, economic, social and health outcomes.
The Annie E. Casey Foundation has been a leader in the field for many years. They are currently unveiling a new body of work related to young adults and tax policy. We are thrilled that Leslie Moore has agreed to share more about this innovative approach to poverty reduction for this edition of Interview with a Funder.
How do tax credits fit in?
The COVID-19 crisis is having devastating effects on young adults – their education has been disrupted and employment opportunities have been stalled or lost. Even prior to the COVID crisis, young adults were the only age group whose rate of poverty rose over the preceding 50 years, and young people remain less likely to have independent access to the safety net (Center on Poverty and Social Policy). Research shows that the Earned Income Tax Credit is one of the nation’s largest and most effective income support and anti-poverty programs for working-age people. Yet the federal EITC currently excludes more than 4 million young adults: those under the age of 25 unless they are raising a child. This also creates challenges for states whose EITC is based on the federal credit. Despite this barrier, several states including California, Maine andMaryland, have expanded eligibility for 18- to 24-year-olds, with New Jersey and Minnesota enacting expansions for 21- to 24-year-olds without qualifying children. By expanding the EITC, we are advancing an equitable policy that addresses the needs of young people while strengthening their economic security.
What advice would you give to funders looking to make the connection between youth and young adults and tax credits?
We have encountered two challenges in advancing this work. The first is that tax credits as a stand-alone issue does not resonate with young people as a top policy priority. The second is that lawmakers do not understand the financial crisis that our young people face and how tax credits could immediately change the financial outcome for many of them. Funders should focus their investments on overcoming these two challenges and making sure that young people themselves are playing an integral role in these strategies.