But she’s had a constant lifeline: the Earned Income Tax Credit (EITC).

When working parents who make less than $55,000 file their taxes, they can expect a credit back that averages a little more than $3,000 every year. Very poor working people without children can also claim a much smaller credit of $295. In 2016, nearly 26 million households received the money, and it lifted 5.8 million people out of poverty. It’s been linked to better health and educational outcomes for kids and their parents.

When Sullivan became a parent for the first time at the age of 18, she got the credit back when she filed her taxes. She’s now 45 and has received it nearly every year since.

“It has literally fed my family” when wages and food stamps didn’t stretch far enough, Sullivan recalled. “I’ve been able to catch up on rent. It’s kept the lights and the heat on.”

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Sullivan lives in Medford, Massachusetts, a couple miles north of Boston, and utility costs can skyrocket in the harsh winters even though she carefully keeps dials turned as low as possible. While the electric company can’t cut her off during the worst of it, as soon as that moratorium lifts she’s often been plunged deep into debt — sometimes hundreds of dollars, even during a mild season.

The financial need among EITC recipients is often urgent: Recipients are more likely to file early in order to get the money as quickly as possible, often at the end of January or early February. And like Sullivan, most use the money to pay down bills and debt or to cover their basic needs; in 2015, 80 percent reported using the money to pay rent, mortgages, utility bills, or credit card debt.

“When I receive the EITC credit … I can pay the bill and get caught up, or at least be able to use that to negotiate with a down payment plan,” she said. “It creates such a relief to know that I can rest my head at night knowing that when I wake up tomorrow there’s not somebody creeping outside my door looking for my electric meter to cut it off.”

“Even at times when I haven’t been in crisis, I’ve been able to use my EITC to supplement my income over the next several months,” she added. It’s during those times that the credit has allowed her to send her children on field trips or participate in sports programs. “It can really enhance the quality of life.” One year, after going without a car for a decade, she spent $2,000 to buy one that allowed her to drive to the grocery store, rather than walking home holding groceries with freezing fingers.

But as powerful as the EITC is, there are plenty of people who receive barely any money from it or miss out entirely. In fact, a childless person living right at the poverty line who gets the credit will still owe federal taxes, pushing him deeper into poverty.

The EITC is also tied directly to work; it doesn’t start phasing in until a family earns its first dollar. That means anyone who is destitute enough to be getting by without any official pay — either earning under the table or not at all — can’t qualify. The share of people who survive with no job and no government cash assistance has been since the mid-90s, reaching one in five single mothers by 2008.

Some politicians want to fix these problems and go even further. Last week, Sens. Sherrod Brown (D-OH), Michael Bennet (D-CO), Ron Wyden (D-OR), and Richard Durbin (D-IL), introduced legislation to expand the EITC for parents and significantly boost it for the childless — increasing the maximum amount a childless worker could get from $529 to over $2,000. It also allows recipients to access up to $500 ahead of tax time, which would hopefully provide families relief throughout the year, not just in one lump at tax time, so they don’t have to turn to payday lenders or go into debt when emergencies arise. The bill has garnered support from nearly every Democrat in the Senate.

In 2017, Brown and then-freshman Rep. Ro Khanna (D-CA) put forward a plan that would have expanded the EITC even more for a poor family with two children, increasing it from the current maximum of about $5,700 to more than $10,000, while childless workers would see their credit grow six-fold. The two lawmakers, along with Rep. Bonnie Watson Coleman (D-NJ), resurfaced the idea in February and extended it to students and people caring for young children, aging parents, and other relatives — none of whom are currently eligible.

The EITC is “the most effective tool we have to put more money in the pockets of ordinary Americans,” Brown, Khanna, and Watson Coleman wrote in an op-ed in March. “We’ve seen a lot of ideas floated to make our economy fairer and fight income inequality. Expanding the EITC…needs to be at the center of those conversations.”

Diane Sullivan is luckier than some: Beyond the federal EITC credit she can expect every April, she can also count on a supplemental state version that adds another 30 percent of its worth because she lives in Massachusetts. But 19 states don’t have such a program. In addition to a federal expansion, the rest could start their own and ensure that their credits are refundable so that families can get the money whether or not they owe taxes.

“We should acknowledge that theses tax credits are a critical lifeline for families,” Sullivan said.

It seemed like a foregone conclusion, then, when a slew of new breaks Exxon requested under the Pelican State’s Industrial Tax Exemption Program, known as ITEP, came up for approval in East Baton Rouge in October.

East Baton Rouge’s public-school teachers, however, had other ideas. They may emerge victorious in a fight against one of America’s largest companies in one of the most-industry friendly states in the country.

Louisiana is one of the poorest states in the U.S., with an education system ranked near the bottom as well. It’s also one of the most prolific granters of corporate tax incentives – which generally lower tax payments for companies if they move operations, build new facilities, or invest a certain amount of money in a particular location – trailing only New York in the total amount it hands out. Per capita, Louisiana grants the most corporate tax incentives in the country by far.

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Louisiana law, like that in many states, says that the legislature must pass a balanced budget, meaning every cent that gets spent on corporate tax incentives or other giveaways to big businesses is a cent that can’t wind up going toward the other things for which the government is responsible, including education. According to a recent report from Good Jobs First, an organization that tracks corporate tax subsidies, school districts in the U.S. lost a collective $1.8 billion due to corporate tax abatements last year.

Citing the connection between budget struggles in their district and the giveaways local officials kept approving, East Baton Rouge’s teachers formally voted to stage a one-day walkout in October if the tax breaks for Exxon were approved. 2018 saw teacher walkouts across the country that brought attention to low pay, shrinking budgets, and other ills of the public education system; Baton Rouge added the effects of corporate giveaways on public schools to that list.

“You don’t have enough money to give us a raise, we’re below pay in terms of across the nation, and now you’re going to cut the budget, but you want plants and industry such as Exxon to get tax money?” said Angela Reams-Brown, president of the East Baton Rouge Federation of Teachers, when asked why the district’s teachers turned their ire on these tax breaks.

She added that teachers and support staff in her district haven’t received a pay increase in 10 years – which means that once inflation is factored in, teachers there have seen a pay cut of $8,500 since 2008 –  and that they are losing instructors to other cities and states that pay better. Plus, she said, special education classes in East Baton Rouge are rationing paper to get through the year.

“We’re taking on Exxon now, but our fight is with any industry who wants a tax exemption from education. Public education can’t afford to pay the taxes of big industries such as Exxon and Shell and others in the state of Louisiana,” she said.

The threatened walkout garnered enough attention to convince the Louisiana state Board of Commerce and Industry, which oversees ITEP, to push back an initial vote on approving the breaks to last week. Alas, the state board formally gave Exxon approval for $6.6 million in tax breaks over five years (after Exxon pulled some of its applications on its own).

But that’s not the end of the fight: Thanks to a change in procedure initiated by Democratic Gov. John Bel Edwards in 2016, local government bodies, including school boards, also need to approve the portion of the tax exemptions that directly affects them. The East Baton Rouge school board will get that chance in the next few months.

East Baton Rouge’s teachers and local activists are confident that they can head the giveaways off at the pass. Reams-Brown confirmed that the walkout threat from the teachers still stands if the school board OKs the new tax breaks and said the teachers union will flood the meeting at which the vote will occur. “We plan to be there in full force,” she said.

“It’s going to be a high-noon moment where we see what the priorities of those officials are,” said Broderick Bagert, lead organizer of Together Baton Rouge, which is also opposed to the tax breaks Exxon requested. “We’re feeling like the level of awareness and understanding now is totally different from anything that’s happened in the past.”

The local business lobby, of course, is decrying the campaign to stop the tax breaks as “pressure from groups using this process to advance their own political agenda.”

It makes sense that schools would be one of the government entities most susceptible to losing money due to corporate tax breaks, since many of those breaks are on property taxes, which are also America’s primary way of funding public education for some reason. The Good Jobs First estimate of $1.8 billion is almost certainly an undercount: Though school districts are supposed to report how much they lose each year due to tax breaks, many don’t.

Of the places that have reported how much money their schools lose, Louisiana is once again near the top of the list, trailing only New York and South Carolina, according to Good Jobs First. Three of the five most affected school districts in the country are located within the state. East Baton Rouge alone lost $17.5 million in the last fiscal year, more than it would cost the district to implement universal pre-K.

Adding some insult to injury, the tax breaks Exxon wants are for plants that are already built; the money isn’t even an incentive anymore, since the work is done, merely a pay out that the company is asking for because it can.

Loads of research has shown that corporate tax incentives don’t actually do what their advocates claim; they simply give big corporations money for shuffling jobs around the country or making investments they would have made anyway. These incentives lead cities and states into a race to the bottom, allowing corporations like Amazon to ignite bidding wars that only benefit shareholders’ bottom lines. According to The Advocate, an East Baton Rouge newspaper, Exxon has received tax cuts worth some $700 million there in the last 20 years, while cutting 1,900 jobs.

East Baton Rouge’s teachers are rightfully saying “enough,” and may even do what loads of other activists have been unable to: Stop a corporate giveaway in its tracks.

On Tuesday, the internet retailer announced that its search for a second headquarters has ended, with Long Island City in Queens and “National Landing,” Virginia, a conglomeration of Washington, D.C. suburbs, selected as sites for its big expansion. The company is promising to bring tens of thousands of jobs to the two areas, along with billions of dollars from direct investments and a broadened tax base from its new, highly-paid workforce. The company also announced a smaller expansion in Nashville, Tennessee.

However, there’s a catch: Both Virginia and New York offered Amazon monetary incentives in an attempt to win HQ2, as it’s known. Until now, the public — and even some lawmakers in those states— had no idea what those incentives were. And it’s ultimately low-income residents in both places who will pay the biggest price.

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Amazon’s announcement included the news that it will receive $1.5 billion in tax breaks from New York, and another half a billion from Virginia, along with promises from both states to make significant infrastructure improvements. As a result, each new job that Amazon brings will cost these cities tens of thousands of dollars.

Depending on which analysis you look at, cities and states in America spend up $90 billion annually on corporate tax incentives. That category of spending has more than tripled since 1990. The theory at work is that incentives are an investment in corporations creating jobs and boosting local economies.

The evidence backing up that theory, though, is thin. In fact, most studies have found that corporate tax breaks have little to no effect on job creation or economic growth, because they mostly encourage shifting jobs from one locale to another without creating any new economic activity. (Think, for instance, of a worker who leaves her current job to take one at Amazon, or moves from Amazon’s Seattle headquarters to Long Island.) What these tax breaks really stimulate is politicians’ efforts to get re-elected, as doling them out is correlated with rising vote shares.

The secrecy surrounding the effort to woo Amazon adds insult to that injury. 238 cities responded to the corporation’s initial request for proposals. Only a few of them made what they offered Amazon public. Reporters and activists in several cities took their local governments to court in an effort to ascertain what they promised Amazon.

The secrecy even extended to local elected officials.“My understanding is the public subsidies that are being discussed are massive in scale,” a New York state senator who represents Long Island City said to CNN before Amazon’s announcement.

New York’s incentive package was overseen by the state’s development office, with Democratic Gov. Andrew Cuomo promising to go to great lengths, including naming both a polluted creek and himself after Amazon, in order to secure HQ2. Already, New York spends more on corporate tax breaks than any other state, including $8.25 billion in 2015.

That officials promised a private corporation unknown amounts of taxpayer money is troubling on its face, and prevented activists and elected officials from organizing against specific proposals. But it’s also problematic because every dollar that winds up going to Amazon is taken from programs that are designed to help the area’s residents more directly.

Since most states have balanced budget requirements, the money spent on Amazon can’t be spent on education, health care, infrastructure, affordable housing, or the host of other responsibilities of local governments. (For instance, the entire annual budget of the Virginia Department of Housing and Community Development is about $150 million — less than one-third of what the state offered to Amazon.) And other corporations have said they want the same deal Amazon received, which would strain budgets even more as states promise ever-bigger sums to major corporations.

Plus, the influx of money and people that Amazon brings will exacerbate inequality in the New York and D.C. areas, which are already some of the most economically unequal in the country. According to the Urban Institute, D.C.-area rents have risen by about 10 percent since 2011, and the median house price is now north of half a million dollars. Per that analysis, “the challenges of rising affordability pressures and lengthening commutes will intensify, and more households will experience hardship” with the influx of Amazon money and workers.

Even before Amazon made its announcement, D.C. was facing a housing deficit of tens of thousands of units, while Arlington County, Virginia, has seen its affordable housing stock plummet by 90 percent over the last two decades. New York is facing similar concerns. Though the effect will be more muted than it would have been in some smaller cities, it will still be significant.

Already, other cities have experienced the downside of being home to big tech corporations that stress local housing markets, including Seattle, Amazon’s main home. An effort to tax big corporations there in order to raise funds to address the lack of affordable housing was defeated thanks to opposition from Amazon.

In many ways, the Amazon HQ2 process has been a charade. After gathering data on hundreds of cities, Amazon wound up going with the home of Wall Street and the home of America’s government, two advantages no amount of money could buy.

Meanwhile, struggling cities across the country were led to believe that an economic renaissance could be headed their way, and spent time and money trying to win something they possibly never had a chance at to begin with, instead of expending those resources on the people they are supposed to serve. The whole thing should be a national embarrassment.

Poverty can impede children’s brain development and harm biological processes in ways that damage long-term health. Numerous federally supported interventions, including Head Start, children’s health insurance, and child nutrition programs are deployed to ameliorate these disadvantages.  While these programs are crucial, they don’t get to heart of the matter.

What if we tackled the problem of child poverty head-on by providing a modest amount of cash assistance to parents?

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In 1997, in the mountains of Western North Carolina—a region affected by grinding rural poverty—one community did exactly that. When the Cherokee Nation built a casino on the border of its reservation, they distributed the proceeds to local tribe members—the average family received $4,000 per year. Since non-tribal communities nearby lived in similar conditions, but were not eligible for the monies, these payments created an opportunity to examine the impact of cash assistance on the children who received it.

Researchers at Duke University tracked the participants from childhood into adulthood, and found that those who received the assistance “used less alcohol and fewer drugs, were less likely to commit minor crimes, and more likely to graduate from high school.”

What’s striking about this assistance—which was given without restrictions, guidance, the stigma of welfare, or the intervention of social workers—is that it paid off large dividends on problems that seemed intractable, such as alcoholism, crime, and education outcomes.  The study also made it clear that when parents have additional resources, they spend it on key investments like education for their kids, safe housing, meeting basic needs, and preventing hardships (like a broken down vehicle) that can push a family into crisis.

These results should not come as a surprise to anyone who has followed the success of the Earned Income Tax Credit (EITC), which provides an average of $3,000 to a working family of three. Studies have found that the EITC facilitates infant development, reducing the incidence of low birth weight. They have also shown that children in families that receive larger credits have higher test scores in elementary and middle school, and are more likely to graduate from high school and complete one or more years of college. In fact, a modest $3,000 increase in annual income for children ages 0-5 is associated with a 17 percent increase in annual earnings as adults.

Given the amount of evidence we have on how much a child’s future can be impacted negatively by poverty, and how that trajectory can be shifted in a positive direction by modest additional resources for their families, it’s time to re-imagine how we ensure that all children have the opportunity to thrive.

Universal child allowances, which exist in many industrialized countries, provide a useful model. These benefits are delivered monthly to help families cover recurring expenses, which is difficult to do with the once-a-year Child or Earned Income Tax Credits. Basic monthly benefits are modest. In Australia, Canada, and Britain they range from approximately $100 to $345 per month per child (USD).

We could establish a universal child allowance in the United States, by reforming our existing Child Tax Credit. Representative Rosa DeLauro’s Young Child Tax Credit Act (co-sponsored by House Democratic Leader Nancy Pelosi and Representative Sandy Levin) would increase the child tax credit to $1,500 per year for children ages three and under, remove arcane earning thresholds that keep the credit from reaching many impoverished families, and deliver the credit monthly (or as frequently as administratively possible).

A report by the Bernard L. Schwartz Rediscovering Government Initiative at the Century Foundation (where I work) modeled a number of different options for a child allowance, and found that a $2,500 universal allowance for children under six would lift 3.2 million children out of poverty—nearly twice as many as the current Child Tax Credit—at a cost of $33.7 billion (that’s less than the U.S. spends on estate tax breaks for millionaires and billionaires). Given the societal costs related to childhood poverty—more than $500 billion annually—it is a price well-worth paying.

Is it possible to move Washington to pass and implement such a bold policy? There is reason for hope. Tax reform is sure to take center stage in the next Congress, and there should be no reduction of corporate tax rates without commensurate help to our most vulnerable residents. Moreover, there is growing support from both the left and the right (and even venture capitalists) for a universal basic income, as well as popular support for family-friendly policies like paid family leave and child care. Given the broad interest in helping both low- and middle-income families, reforming the child tax credit to maximize its reach in the fight against child poverty should be a priority for any new administration.

Despite what some conservatives might have you believe, there are very few financial supports in place for families with young children that assist with the purchase of baby supplies. Families with low incomes are doubly penalized in that they have fewer resources to spend, and therefore pay more for basic supplies because they can’t buy in bulk or purchase memberships at wholesale stores.  In contrast, I have annual memberships with Costco and Amazon Prime and a car that allows me to shop around to find the best deals.

I decided to spend a week tracking just how much my husband and I save on baby supplies due to economic privilege. I tallied what we spent and compared our costs to what a low-income parent would need to spend for the same items at stores in our neighborhood.

Diapers and wipes

I’m able to purchase diapers for $0.22 apiece through a discounted online delivery service that requires a monthly fee for subscription. By comparison, a small package of diapers costs $0.36 per diaper at the local grocery store. At 60 diapers per week, I save $8 per week on diapers. Similarly, we buy our wipes at Costco and save $1.00 per week.

Additional cost for low-income parents: $9

Food

We buy our formula at a big box store and stock up when they have a sale. Recently, they had a $25 rebate for shopper who spend $100 or more. A great bargain for us, but $100 is easily a quarter of what a minimum wage worker makes in a week. Our total for formula comes to $20 per week, compared to $29 per week at our local grocery store. Breast milk is also far from free. A pump, bottles, and other supplies can easily cost hundreds of dollars per month. And that assumes that a minimum wage job provides adequate breaks to pump and a place to store the milk, neither of which is common among low-wage jobs.

Solid food for babies is much cheaper to puree at home than to buy at the grocery store. I have a food processor, dish washer, refrigerator, and storage containers that make baby food production relatively easy. For $5, I bought enough food for a one-week supply of meals. To buy the same amount of jarred food at the grocery store costs $18.

Additional cost for low-income parents: $22

Baby supplies

I have a credit card that allows me to accrue points that I can spend on Amazon, which provides $30 to $50 per month (or about $10 per week) in free goods. In the last six months alone, I’ve gotten swaddles, laundry detergent, diaper cream, and bottles—all for free. Many parents in poverty do not have the necessary credit or income to qualify for a credit card, let alone one that provides rewards. And as a result of credit discrimination, people of color often have lower credit scores that might otherwise facilitate credit cards with these kinds of perks.

Additional cost for low-income parents: $10

All told, my family saved about $41 per week compared to what a minimum wage worker would likely spend. While that might seem like a small amount for a family with a lot of disposable income, it adds up to more than $2,000 a year and over 10 percent of total annual income for a family of three living at the poverty line. That means in D.C., where the minimum wage is $10.50 per hour, a worker earning that amount would need to work approximately 200 additional hours a year just to buy the same items.

Last year, the Center for American Progress proposed a Young Child Tax Credit that would invest in families when income matters most for children’s long-term outcomes and family budgets are often most strained. Representatives Nancy Pelosi and Rosa DeLauro introduced legislation that would create such a credit, as did Senator Michael Bennet.

This kind of reform would not only help all families afford the critical items they need to thrive, it would also mark a step forward in ensuring that people in poverty no longer have to pay more than other consumers for the things that all families need.

That’s because for millions of Americans, tax time is a big boon—their refund is the single largest check they’ll receive all year.  In fact, for lower-income tax filers, their annual refund can amount to 30 percent or more of their income for the entire year, providing a rare period of financial security in a year full of financial distress. These filers spend their refunds mostly on paying down debts, investing in their kids and their own future, and putting some savings away.  For the rest of the year, though, a near majority of Americans are financially insecure, lacking even the most basic savings to deal with an emergency like reduced work hours or car trouble.

And that’s the problem with tax season: it’s just one short season. But life goes on and financial security shouldn’t end when that refund check is gone. A new bipartisan bill, the Refund to Rainy Day Savings Act, introduced by Senator Cory Booker (D-NJ) and Senator Jerry Moran (R-KS), aims to stretch out the positive impact of tax season by boosting emergency savings and year-round financial security.

The legislation tackles that goal in two simple ways. First, it allows all tax filers to opt in to a new Rainy Day Savings program at tax time. Under this program, when tax filers check a box on their 1040, a full 20 percent of their refund is saved for six months, accruing interest over the course of that period. Six months later, that deferred refund is put into their direct-deposit account. (Any account that is direct-deposit eligible can be used, including prepaid cards.) Filers would still get a sizeable refund at tax time, but they also get to set some aside for the year ahead and earn interest on it.

The second big component of the bill is designed specifically for low-income households. The Refund to Rainy Day Savings Act creates a new research and evaluation pilot program run by the Department of Health and Human Services to test out different models of savings matches for tax time. Driven by the needs of local anti-poverty practitioners and the populations they serve, this program will invest in innovative strategies to help lower-income households build savings and become financially secure. For example, as we’ve written previously, a pilot site could set up a 50 percent match for opting into the program. If the family saves $500 of their tax refund, they’ll receive $750 plus interest in six months. For reference, $750 is larger than the typical high-interest payday loan.

The legislation also provides research funding to evaluate what works and what doesn’t in the field of matched savings for low-income families and individuals, paving the way for future reforms that could scale up countrywide. This is what real evidence-based policymaking looks like.

Of course, the Rainy Day Savings program won’t eliminate financial insecurity. Families need adequate income to get by day-to-day, not just savings to weather emergencies. Low-wage workers who can’t claim children on their tax return in particular will continue to lose out under the current tax code unless Congress acts to stop taxing them into poverty. And a deferred refund won’t work for everyone. Some households will need immediate access to their tax refund. It makes sense—it’s their money and they should have access to it when they want and need it.

But the Refund to Rainy Day Savings Act takes a critical step in the right direction. It’s the first bipartisan bill of its kind aimed at expanding emergency savings and financial security. It creates a new tool that could help millions of low-wage workers take better control of their financial lives. And it will do that while simultaneously laying the groundwork for future large-scale reforms.

The good news is that it won’t take an act of divine intervention to boost financial security for millions of lower-income Americans—just an act of Congress. When two senators from two different parties can come together to announce something like this legislation, the rest of Congress should take notice and make it happen.

It’s working people like Joanna who have real stakes in the current debate. Joanna has two children—a 14-year-old daughter and a 5-year-old son. She works full-time as a cashier on the third shift at her local deli. She earns the current minimum wage in New Jersey—$8.38 per hour—which means she makes just over $17,000 annually. To say she struggles to make ends meet is a great understatement.

“I have to pick and choose my battles when it comes to paychecks,” she says. “I sacrifice whatever I may need or want because my children come first.”

Joanna receives the EITC and CTC, both of which are intended to encourage work and offset federal payroll and income taxes for working households.

“It lifts a burden off my back,” Joanna says. “I’m able to catch up on all our bills…I was able to get my children coats for the winter, shoes that will last them for a while, school clothes and underclothes all at once. It’s a lifesaver.”

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Congress must now decide whether to make key parts of the EITC and CTC permanent as part of a broader tax package that primarily benefits corporations. If they let key provisions of these credits expire at the end of 2017, Congress will be cutting Joanna’s family income by over $1,500 per year. That’s income that makes a real difference in the lives of Joanna and her children.

“The thought of [losing income from the tax credits] has been stressing me out,” she says.

Joanna isn’t the only one who is worried. If Congress lets these provisions expire, nearly 50 million Americans, including 25 million children, would face a loss of income. In 2018, 16 million people would either fall into poverty, or fall deeper into poverty. In New Jersey, where Joanna lives, 219,000 families and 435,000 children would be impacted if Congress cuts these credits.

Moreover, these tax credits don’t just mitigate poverty and economic hardship in the short-term—they have tremendous positive effects on children’s long-term health and success. After significant increases in the credits in the 1990s, there was substantial improvement in the health of new born children. Indicators of child wellbeing such as low-weight births and premature births improved, as did indicators for the health of the mothers of these children. Research has also shown that the EITC and CTC improve the educational outcomes for children according to a variety of indicators, including academic test scores. Children from families receiving these tax credits are also more likely to attend college and earn more as adults.

In short, these tax credits are public policies that work—and work very well. Right now, Congress is debating how to extend more than 50 tax credits and incentives. Many of these are costly credits for big corporations. In fact, out of the $400 billion in proposed tax benefits, two-thirds would go to businesses. If Congress considers making these business credits permanent, they must also make key improvements to the EITC and CTC permanent for working people like Joanna.

In her words, “A bonus can cost you!”

According to Internal Revenue Service (IRS) data, New Yorkers claimed the Earned Income Tax Credit (EITC) for a cumulative $2.5 billion in refunds. The EITC—one of the greatest tools we have for fighting poverty—gives families and individual tax filers with low- or moderate-incomes sizeable refunds, depending on income level and number of dependents. Research shows that the EITC returns an average of $2,500 to eligible filers in New York City—a significant cash infusion for low-income families. More often than not, a tax refund check is the largest single check these families receive all year. In New York City, most EITC-eligible people are also eligible for free tax preparation through the Volunteer Income Tax Assistance (VITA) network, but fewer than 5 percent take advantage of it. Where are the other 95 percent? And why would anyone opt to spend hundreds of dollars for something that is offered for free at nearly 200 VITA sites citywide?

Clearly there needs to be an improved process for tax filing.

The NYC Department of Consumer Affairs (DCA) Office of Financial Empowerment has joined forces with Parsons Design for Social Innovation and Sustainability (DESIS) Lab, the Center for Economic Opportunity (CEO), Food Bank For New York City, Citi Community Development, and Mayor’s Fund to Advance New York City—to create a new approach to free tax preparation services in New York City. It’s called Designing for Financial Empowerment.

The initiative is composed of three phases: discovery, during which the research team was embedded in the VITA sites and interviewed community members and stakeholders; co-design, where the research team collaborates with users, service providers, government officials, funders, and others to generate ideas to address VITA challenges; and iterative prototyping, in which one or multiple solutions will be rapidly tested at the VITA sites and revised based on user responses.

The discovery phase has already taken place. Researchers interviewed site managers, volunteer tax preparers, filers, and host organizations at VITA sites to learn firsthand about the challenges and capabilities at the sites. They worked closely with project partners to gain a better understanding of tax-related policies, services and interventions.

During this phase, the researchers learned that many filers have a misconception that because VITA services are free they are of lower quality than paid services. Some people also have a misunderstanding about who is responsible if they are audited by the IRS. They believe preparers are responsible for the accuracy of their returns, so they choose whoever promises the largest refund. This could sometimes mean choosing paid preparers for illegal benefits. Some of these opinions are captured in the Designing for Financial Empowerment Tax Time Video.

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The initiative is now in the co-design phase. The design team is bringing together tax filers, policymakers, community and civic leaders, social service organizations, and local business owners, to discuss the discovery findings and co-design potential solutions for new and improved services through a series of workshops. The co-design phase will create the basis for prototypes for VITA sites.

During the final phase, prototypes will be tested at VITA sites run by Food Bank For New York City—a champion of free tax preparation services. The project’s continuous engagement with VITA clients and preparers during this phase will allow designers to make improvements based on the feedback.

The goal is that the prototypes developed by this process will not only help increase filer access at these VITA sites—and trust the services that the sites provide—but also address a capacity problem. Filers often have to wait anywhere from a half hour to several hours to have their taxes prepared. For many of them, taking time off work to wait their turn may be challenging. Moreover, childcare can be costly or unavailable, and bringing children to VITA sites can make it more difficult for filers and others who are waiting.

Although Tax Day has just passed, we’re hopeful that this initiative will help us reach the thousands of New Yorkers like Cynthia, and ensure that they not only take advantage of free tax preparation services, but also receive every dollar they’re eligible for through the Earned Income Tax Credit, NYC Child Care Tax Credit, and other refundable tax credits.

For more information about DCA’s work, visit nyc.gov/consumers and for more information about the Designing for Financial Empowerment initiative, visit dfe.nyc.

A local crisis center referred me to the Blue Valley Community Action Partnership for assistance with food and housing. After listening to my situation, the staff treated me with dignity as they provided my family with nutritious food from the food pantry, clothing, household goods, and new backpacks full of school supplies for my children. My family was enrolled in the Homeless Prevention and Rapid Re-housing Program, which enabled me to find a safe home by providing temporary financial assistance for rent and utilities.

I enrolled in the Supplemental Nutrition Assistance Program, or SNAP, so I could buy groceries. And Medicaid provided us with vaccinations, medical and dental care, prescriptions, and counseling services, which allowed my kids to enroll in a new school.

The security of having a home, food, and medical care was a tremendous weight off my shoulders, allowing me to focus on finding employment in our small rural community. In August, two months after initially receiving help, I obtained a part-time job at a retail store. A few weeks later, I became a full-time employee as a case coordinator for the Homelessness Prevention and Rapid Re-housing Program when it became available at the Blue Valley Community Action Partnership, the same program that originally helped me.

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I have now been employed there for more than three years and gained the job skills needed to advance to my current position as a research and development officer.

It has been a struggle to become financially independent; at times I needed to work two jobs and had to rely on income tax credits to make ends meet, but I am fortunate to no longer need assistance for my family’s basic needs.