The Low Income Tax Credit Can Benefit Many People

An idea that was cleared by the House in 1986 clearly made available some provisions to offer credits to those builders who were prepared to supply very affordable houses for low income people. There are specified factors for determining the group of low income families, and family homes were intended to be built for them by these housing groups.

In contrast to the traditional incentives in income taxes for these purposes, which were proving to be ineffective to attract large housing companies to build homes for low income people, the Low Income Housing Tax Credit Act served to generate many thousands of very affordable houses for lower income households.

This particular act was intended to give dollar to dollar rebates to the builders. The tax rebate on the other hand just offered rebates on their taxable income, which was not enough for these large projects. After a gap of twenty five years, this particular act is proving to be extremely effective in a few states while application in other states has also proven to be beneficial for many low income families.

At present a few groups in Iowa are attempting to pass another such bill known as the Low Income Tax Credit, that will enable lower income groups to enjoy tax rebates in addition to some additional income that will be supplemented as an incentive. By doing this, such groups state that it will assist to improve the financial conditions of lower income people and would also fill up some of the gap between them and the high income individuals.

According to this Low Income Tax Credit bill, the tax credit so earned would be available to low income people and provide a supplement to their earnings. More about this is yet to be finalized. Democrats are also backing these groups to create a far more extensive plan for this bill and people are hopeful of getting it enacted in upcoming sessions. The low income tax credit will not automatically establish jobs for the individuals, but will definitely help to improve the lives of those individuals with lower incomes. This particular act will provide businesses flexibility to select employees for low profile jobs. If the act is enacted only in Iowa, it will benefit over 230,000 individuals earning less than $46,000 per year.

No matter how many such bills are introduced in the House and enacted, the main question is how will the government fill up the gap between low income and high income groups. Various businesses have formulated their own rules to handle this issue. While the government is also doing its chunk to do so, the gap seems to be endless and more such acts to help the financially distressed only appear to do a fraction of the job necessary.

Want to know more about tax credits? Be sure to visit my site to find out more about the family tax credit and working tax credit.

About The Author

TK Bradley

tk bradley is a tax relief expert with many years of dealing with the irs and helping taxpayers to understand their rights and to settle their tax debt problems.