A refund of close to f$5,000 could be especially timely for Missouri families during this recession. That's the upper end of the federal Earned Income Tax Credit (EITC) for low- to moderate-income working families - and a report released today by the Children's Defense Fund shows Missouri families eligible for the refund are being targeted by tax preparation companies and those selling refund anticipation loans and checks.

CDF press secretary Ed Shelleby says those services cost Missouri EITC families about 61 million dollars.

"What is often hidden is that there's a lot of fees attached to this, and you can lose a significant portion of what your refund will actually be."

Shelleby says selling services to EITC families is a profitable business – but one he says steals money from families who need every dollar, especially this year.

"Even before this recession, these tax preparation centers took over three billion dollars from low-income families – money that needs to be in the pockets of these families."

Companies offering the loans and EITC filing say they provide valuable services for families needing access to money quickly, and for those who feel overwhelmed by tax paperwork. Shelleby points out that there is true free filing available, along with direct deposit of refunds, through the IRS Volunteer Income Tax Assistance program – with locations around the state. CDF is also calling for federal laws to protect families from predatory services, and for an expansion of free tax preparation offerings.

A listing of free tax preparation locations is available by toll-free telephone at 1-800-829-1040.

The full report by the CDF, Avoiding the Pitfalls of Refund Anticipation Loans," is available online at
www.childrensdefense.org


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A new federal report shows anti-poverty policies enacted by New Mexico are making a big difference.

This month, the U.S. Census Bureau has released a supplemental report measuring poverty at the state level for the first time.

Emily Wildau, senior research and policy analyst at New Mexico Voices for Children, said the report still ranks the state last in the nation, at 28% under the Official Poverty Measure but when newly enacted state programs are taken into account, poverty decreased dramatically from 2021 to 2023.

"When you look at that same time period, and you use the measure that counts things like refundable tax credits and noncash benefits like SNAP, New Mexico's child poverty rate drops to just 8.9%," Wildau pointed out. "Which is actually better than the national rate."

The national child poverty rate is 10.4%. Wildau noted one disappointing figure in the data: The state's rate of uninsured children rose to almost 6% in 2023, compared to about 4% in 2022, likely because of changes made to Medicaid following the pandemic.

Wildau emphasized many policy changes made by New Mexico lawmakers are not reflected in nationally-generated data looking at children's well-being, often because the policies are new and have not been incorporated into how poverty is measured.

"We're doing really good things," Wildau outlined. "Increasing our state-level Earned Income Tax Credit, adding a new state-level Child Tax Credit and expanding SNAP eligibility October 1st up to 200% of that kind-of official poverty rate."

Along with New Mexico, 13 other states boosted fully refundable Child Tax Credits in 2024, aimed at enhancing economic security for low- and middle-income families. About 43 million people, or 13% of Americans, lived in poverty last year.

The number of West Virginia children living in poverty remains among the highest in the nation, and more children are living in households struggling with hunger, according to the latest federal data.

The end of pandemic supports combined with rising inflation, rent, and the cost of living, are to blame experts say.

The expanded Child Tax Credit cut child poverty in half, said Salaam Bhatti, SNAP Director with Food Research & Action Center.

When it ended, he said more families dipped back into poverty. Now, the child poverty rate has hit nearly 14%.

"Had we added a few more dollars to that program, it could have cut child poverty entirely," said Bhatti. "But it was a deliberate policy choice that the government made to not do that, and then another deliberate choice to remove that expansion."

According to the West Virginia Center on Budget and Policy, child poverty in the Mountain State dipped from 25% in 2022 to around 20% in 2023.

But despite the reduced numbers, the number of kids living in poverty remains among the highest in the nation.

Nearly 14 million children live in households currently experiencing food insecurity, up by more than 3% from 2022.

Bhatti noted that nearly 35% of single parent households headed by women struggle to pay for groceries.

He said his organization wants Congress to protect the Thrifty Food Plan, which sets the standard for the maximum amount of SNAP benefits households receive.

"Some lawmakers want to cut that Thrifty Food Plan adjustment," said Bhatti, "and as a result, that would cut $30 billion from SNAP benefits over the next 10 years."

Experts say kids who eat healthy meals are less likely to develop high blood pressure, diabetes, dental cavities, and other health problems.

But as more kids go hungry or lack access to quality food, they're also more likely to be uninsured.

According to data from the Center on Budget and Policy Priorities, the number of children without health coverage rose to nearly 6% in 2023.




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During this week's presidential debate, Vice President Kamala Harris proposed reviving the Child Tax Credit, which was part of the American Rescue Plan Act.

Harris says she'd raise the credit to $6,000 for newborns, renewing focus on its impact for Ohio families. However, the U.S. Senate recently rejected House Resolution 7024, which aimed to expand the Child Tax Credit.

Analysts have said the proposal could have lifted 400,000 children out of poverty, including thousands in Ohio.

Lauren Reliford, public policy director for the Children's Defense Fund, cited a "lack of political will" as the main barrier to expanding the credit.

"But at this point, childhood poverty is a policy choice," she said. "The folks that have the power to do it know and have seen the evidence - and they haven't done it."

A Child Tax Credit expansion initially passed in the House with bipartisan support, including all but one Ohio representative. However, critics of the expansion have voiced concerns about the cost to taxpayers and potential misuse. These factors contributed to its rejection in the Senate, despite widespread support from family advocacy groups.

Reliford also pointed to the broader impacts of poverty on children and the long-term consequences of inaction.

"Poverty is a toxic stress," she said. "Children see their parents being stressed, and they take that on, too. And so, why are we allowing these children to grow up in spaces and places without the necessary resources they need?"

The Child Tax Credit has been credited with significantly reducing childhood poverty during the pandemic, but its future remains uncertain as the debate continues in Washington.