RALEIGH (April 8, 2021) – North Carolina lawmakers have filed a new bill that will provide an income boost to families hit hardest by the COVID-19 recession and help them meet basic needs while also improving education and health outcomes of their family members.

The Recovery Rebate for Working Families Act (SB 576/HB 499), filed by Senators Kirk deViere (District 19 – Cumberland), Michael Garrett (District 27 – Guilford), and DeAndrea Salvador (District 39 – Mecklenburg), and Representatives Wesley Harris (District 105 – Mecklenburg), Linda Cooper-Suggs (District 24 – Wilson), Brian Farkas (District 9 – Pitt), and Brandon Lofton (District 104 – Mecklenburg), will serve as a bottom-up tax cut for North Carolina working families. While most tax cuts disproportionately benefit large companies and wealthy people, the Recovery Rebate is targeted to support North Carolina working families that earn middle and low wages and have been most negatively impacted by the COVID-19 recession.

“This recovery rebate for working families is so important,” said Representative Harris. “The poorest 20 percent of our state pay the highest percentage of their total income in taxes. This bill is one of the first steps we can take to begin to rectify that problem.”

Many of the families that will qualify for the Recovery Rebate are in frontline industries, working for wages that are too low to meet basics for a family of four in North Carolina and at jobs with greater risk of contracting COVID-19 while at work. Many workers who were able to maintain employment this past year have seen their hours and wages cut, reducing income to meet the basics and make sure their family has what they need.

MaryBeth Cochran has been working to provide for her four grandchildren as the COVID-19 recession impacted her ability to earn a steady income throughout the past year. She was furloughed from her job, then later laid off.

“Since losing more than half my income, we’ve been in crisis,” Cochran said. “If this bill became law, my family would receive around $500 more each year at tax time. Those extra dollars would mean food on the table, heat in the winter, shoes for growing kids, medications doctors say we need.”

In addition to helping working families meet their immediate needs and recover faster from the damaging effects of the pandemic, the Recovery Rebate also helps children thrive in educational settings and improve the physical and mental health of both children and adults in claiming families. The credit also gives children access to resources that prevent a “summer slide,” said Heidi Norwick, Executive Director of the United Way of Alamance County, an IRS-certified Volunteer Tax Assistance site.

“If children are able to be part of a summer camp or summer enrichment…all of those add to educational attainment for children,” Norwick said.

Because of the strong economic support it provides to families, the CDC recommends a Recovery Rebate as an important tool to reduce cases of child abuse and neglect, and the data support this recommendation.

“This type of rebate has been associated with an 11 percent decrease in foster care entries compared to states without the same type of support for working families,” said Melea Rose-Waters, Policy Director of Prevent Child Abuse North Carolina. “This would mean that approximately 1,150 fewer children or 60 full elementary school classrooms of children could be diverted from entering foster care each year.”

Read the full text of the bill here (SB 576) and here (HB 499).

FOR MORE INFORMATION CONTACT Heba Atwa, Policy Advocate, Budget & Tax Center, heba@ncjustice.org; Mel Umbarger, Senior Communications Specialist, Budget & Tax Center, mel@ncjustice.org