Congresswoman Sylvia R. Garcia Reintroduces The Stop Earned Income Tax Credit and Child Tax Credit Seizure Act

May 14, 2021
Press Release

Contact: Daniela Campos, Press Secretary (Garcia) | Cell: 202-227-0330 | Daniela.Campos@mail.house.gov 

WASHINGTON, DC —Today, Congresswoman Sylvia R. Garcia (TX-29) refiled the "Stop Earned Income Tax Credit and Child Tax Credit Seizure Act". The legislation would prohibit the federal government from “seizing,” or garnishing, an individual’s Earned Income Tax Credit (EITC) or Child Tax Credit (CTC) for purposes of paying back student loan debt.

Between January 1 and March 12 of 2020, the U.S. Treasury Department took almost half a billion dollars in seized tax refunds from roughly one million federal student loan borrowers across the country.

Rep. Garcia’s legislation also comes on the heels of Speaker Nancy Pelosi’s Child Tax Credit Week of Action for members of Congress to encourage constituents to file their taxes on time, and claim the CTC credits, if eligible.

Congresswoman Garcia’s statement:

“According to the IRS’ most recent tax data, in my district alone, over 80,000 households received the refundable portion of the Child Tax Credit. Furthermore 89,110 households in my district received the EITC in 2018. I would hate for any of my constituents to miss out on these life-saving, critical tax credits just because they owed student loan debt.” Said Congresswoman Garcia

“The EITC and CTC are both incredibly effective anti-poverty tax credits that reward hard-working families and individuals, many of whom are women and people of color. Many taxpayers anticipate these tax credits in hopes of getting back on their feet or putting food on the table. However, too many taxpayers around the country live in fear of having their credits seized. I look forward to working with my colleagues in Congress to protect my constituents, and theirs, from being harmed by this awful practice. When families can access their well-deserved tax credits, they are more likely to get back on their feet, regain financial stability, and ultimately, pay back their debt.” concluded Garcia.

The bill is currently endorsed by the National Consumer Law Center (on behalf of its low-income clients), NETWORK Lobby for Catholic Social Justice, Prosperity Now, the Center for Law and Social Policy (CLASP), National Council of Churches, Hispanic Federation, and Student Debt Crisis.

Statements from the Endorsers:

"The need for the Stop EITC and CTC Seizures Act is clear: The EITC and CTC lift millions of children out of poverty. When the government seizes these payments, it leaves children in poverty and diverts funds that would otherwise be used to meet families' basic needs to government coffers," said Abby Shafroth, an attorney with the National Consumer Law Center's Student Loan Borrower Assistance Project. "Student loan default disproportionately harms Black and brown borrowers; and with 1 in 5 student loan borrowers in default, millions of low-income student borrowers face loss of EITC and CTC payments because they pursued an education. Congress wisely expanded the EITC and CTC in 2021 to meet the urgent needs of families facing food and housing insecurity, and Congress must now act to ensure these families actually receive the support intended."  

Mary J. Novak, Executive Director of NETWORK Lobby for Catholic Social Justice, another endorser of the bill, issued the following statement of support:

“For families experiencing economic insecurity, every day can be a challenge to afford the basic necessities—food, health care, housing, and transportation. The Child Tax Credit and EITC reduce poverty and promote economic mobility, but taxpayers who have defaulted on their student loan debt are kept from these life-giving benefits. This harmful and counterproductive practice disproportionally harms Black and brown taxpayers, who face greater amounts of student loan debt due to the persistence of the racial wealth gap. This practice is misdirected, causing the children of parents whose refunds are seized to suffer the most. NETWORK Lobby for Catholic Social Justice welcomes the introduction of the "Stop Earned Income Tax Credit and Child Tax Credit Seizure Act" and calls on Congress to pass this bill quickly.”

Another endorser of the bill, Prosperity Now issued the following statement: “Prosperity Now appreciates Congresswoman Sylvia R. Garcia’s (D-TX-29) leadership on the just-introduced “Stop EITC and CTC Seizures Act.” If passed, it will keep recipients of the Earned Income Tax Credit and Child Tax Credit from having their tax credits reduced, or even seized, because of outstanding student loan debt.  Prosperity Now strongly believes in expanding on the success of critical opportunity-boosting tax credits as the economy recovers — and beyond. By safeguarding important tax credits like the Earned Income Tax Credit and the Child Tax Credit, we help ensure that families receive all benefits they are entitled to. We must protect these vital tax credits, which provide critical support to low- and moderate-income households, especially households of color.”

Twenty-seven (27) of Congresswoman’s Garcia’s Democratic colleagues joined as original cosponsors including Representatives Eleanor Holmes Norton, Veronica Escobar, Pramila Jayapal, Suzanne Bonamici, Ilhan Omar, Raul Grijalva, Barbara Lee, Marie Newman, Jan Schakowsky, John Larson, Jesús G. “Chuy” García, Rashida Tlaib, Adriano Espaillat, Frederica S. Wilson, André Carson, Ayanna Pressley, Nydia Velazquez, Bonnie Watson Coleman, Ro Khanna, Alexandria Ocasio-Cortez, James P. McGovern, Dwight Evans, Vicente Gonzalez, Lucille Roybal-Allard, Jamaal Bowman, Karen Bass, and Sheila Jackson Lee.

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Congresswoman Sylvia R. Garcia was elected to the U.S. House of Representatives in November 2018, becoming the first Latina ever to represent the Texas 29th Congressional District. She serves on the House Judiciary and Financial Services Committees.