Eligible Residents Must File Taxes to Be Automatically Enrolled and Receive New Monthly

As District residents begin filing their taxes, there are tens of thousands of families who 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.

The challenge? There are thousands of low-wage residents who are eligible, but might leave money on the table because they don’t file their taxes thinking they don’t owe any money. All at the same time that the federal government is pulling back the pandemic-issued increases to SNAP benefits for millions of Americans.

The Monthly Basic Income program comes at a critical time for District residents, as 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 an average of $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 $50-250 every single month. And all they have to do is file their taxes.

Councilmember Allen created the Monthly Basic Income program as part of the Homes and Hearts Amendment in July 2021 as part of the FY22 budget passed by the Council. Starting this year, enrolled low-income families (think less than $60,000 annually for a family of four) can start receiving a check.

“This has the potential to be one of the most important policies to go into effect in years in the District,” said Councilmember Charles 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.”

Here’s how it works: currently, there is a local, District-funded match for the federal Earned Income Tax Credit that is issued annually. That local match helps increase the return for low-income families who file a return.

As part of the Hearts and Homes Amendment, Councilmember Allen fought to dedicate $30 million more to low-income households through that local match of the federal EITC. That match will grow to $50 million in the coming years and will be the most generous match in the nation. There is no end date for the program.

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

Background:

First-Ever Monthly Basic Income: Homes and Hearts proposes a monthly stipend for families who are benefit from the Earned Income Tax Credit beginning in 2023 that builds off of DC’s existing EITC local match. That’s a lot of jargon, but at full implementation, for most of those who qualify it would mean an extra cash each month for the early 35,000 Washingtonian households benefit from the EITC.

A report by the District CFO found that it also may 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 a great 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.

Residents can claim this credit when they file taxes. But we are also creating a first-in-the-nation program to provide the credit as a monthly payment throughout the year. Just as many of us pay our taxes a little every paycheck, we’ll allow those who qualify to collect a little of the credit they are due during the year. To do this, Homes and Hearts increased the District’s existing local match of the federal Earned Income Tax Credit (EITC) and converting it from an annual payment to a monthly one for households already receiving the EITC annually.

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Press Contact: 

Erik Salmi
[email protected]