38.8 F
Washington
Saturday, February 24, 2024
Home​NewsAre You Eligible for Monthly Basic Income? File Your Taxes

Are You Eligible for Monthly Basic Income? File Your Taxes

Tens of thousands of eligible District families will automatically be enrolled in the District’s new Monthly Basic Income program and begin receiving a monthly check to help boost their family budget. It could make a tremendous impact on their lives –if they take advantage of it. 

Thousands of residents are eligible but might miss out if they don’t file their taxes, thinking they do not owe any money.  

The timing seems fortunate: SNAP Emergency Allotments will end March 1, returning many household’s SNAP benefits to pre-pandemic levels and leaving many desperate families with less funds each month. The average family is expected to lose $82 a month from their benefits.  

The District’s new Monthly Basic Income program could help buffer that loss for some families with monthly checks ranging from an estimated $50 to 250 every month. And to receive the Monthly Basic Income, all these residents need to do is file their annual taxes to be automatically enrolled. It could mean extra cash each month for the nearly 35,000 Washingtonian households that benefit from the EITC. 

A report by the District CFO found that the program could help the lowest-income individuals and families in the District fight the pressure of gentrification and remain in the District. The EITC helps households earning up to $57,414 for a family of three annually. In DC, the median household income for Black / African American residents is $46,201 and for Latino families is $83,170, while for white households it is $143,150. A monthly basic income is an important way to work toward racial equity by supporting households who both could use the funding most and have historically faced systemic racism and exclusion from government benefits. 

You remember when this happened in DC Council; the Post wrote that the District voted to increase taxes on the rich. The proposal is funded by an increase to the marginal income tax rate on individuals earning more than $250,000 a year. So, those making $300,000 dollars a year will pay another $31 in monthly taxes. DC has the lowest total tax burden in the region for high-income households making more than $150,000 dollars a year.

Residents can claim this credit when they file taxes. But the District is also creating a first-in-the-nation program to provide the credit as a monthly payment throughout the year. Just as many residents pay taxes a little every paycheck, the District will allow those who qualify to collect a little of the credit they are due during the year as a monthly payment. To do this, Homes and Hearts increased the District’s existing local match of the federal EITC and converted it from an annual to a monthly payment.  

Councilmember Allen created the Monthly Basic Income program in July 2021 as part of the Homes and Hearts Amendment, introduced together with Councilmembers Brianne Nadeau (Ward 1-D), and Janeese Lewis George (Ward 4-D.) It was part of the FY22 budget passed by the Council. Starting this year, enrolled low-income families (those earning around $57,000 annually for a family of three) can start receiving a check. 

 “This has the potential to be one of the most important policies to go into effect in recent years in the District,” said Allen. “This isn’t a pilot program or an experiment. We know providing extra funds to families who have desperately few resources can have enormous benefits for everyone. And while I wish that the federal government would maintain SNAP benefits at higher levels, I am glad this is coming online at this moment to soften the blow.” 

There is already a District-funded match for the federal Earned Income Tax Credit (EITC) issued annually to increase the money back for low-income families who file a return. 

The Hearts and Homes Amendment gets $30 million more to low-income households by increasing the DC funds that match of the federal EITC. Funds grow to $50 million in the coming years and will be the most generous match in the nation. 

To enroll, eligible families just need to file their taxes and apply for and receive the EITC. Depending on an applicant’s income and family size, they could receive $50 to 250 a month this year, an amount that could increase over the coming years to as much as $500 a month. 

Related Articles