Bill Would Give Former Foster Youth Early Access to Tax Credit

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WASHINGTON — A proposed bill aims to give former foster youth a financial boost as they transition into adulthood.

The Foster EITC Act (S 2327) would allow certain former foster youth to access the Earned Income Tax Credit at age 18, rather than waiting until age 25. The federal tax credit is for working individuals and families with low and moderate incomes, and is widely seen as a way to encourage work and reduce poverty.

The bill’s supporters said young adults often have financial support from their families after they turn 18, but foster care youth usually do not. The tax credit is one way to bridge the gap as foster youth learn how to live on their own, supporters say.

“Foster youth are America’s children, and we must do our utmost to mitigate the unique challenges they face as they enter adulthood, particularly financial instability,” Sen. Bob Casey, D-Pennsylvania, lead sponsor of the bill, said in a statement.

Both Republicans and Democrats have shown interest in reforming the EITC credit, and supporters of lowering the age for former foster youth hope to capitalize on that momentum, possibly as early as next year.

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“It has a bipartisan bent. Everyone wants to support the most vulnerable members of our society, and it’s smart, effective policy,” said Lindsay Gilchrist, founder of the consultancy Gilchrist & Company, who has researched the EITC policy with funding from The Annie E. Casey Foundation and The Jim Casey Youth Opportunities Initiative.

The tax credit currently is not available to anyone under age 25 unless they are a parent. In addition to the provision for former foster youth, the bill would lower the qualifying age to 21 for all childless adults. The bill defines former foster youth as those who were in care on or after their 16th birthday.

Nearly 25,000 young adult ages 18 to 21 exited foster care during 2014, according to federal data.

Gilchrist and Greg Srolestar, another consultant who researched the policy, said that foster youth have said during focus groups that the credit would help them pay for items that can be hard to afford on a tight budget, such as books for school or a car.

“Small amounts at the end of the year can be a significant help,” Srolestar said.

The bill does not have an identical companion in the House, but Rep. Danny K. Davis, D-Illinois, has introduced the Julia Carson Responsible Fatherhood and Healthy Families Act of 2015 (HR 3005), which has similar EITC language for former foster youth.

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