Put the Earned Income Tax Credit to Work for Your Community
By J. Janelle George and Gretchen Lehman, Program Managers, Office of Community Services
Today, in honor of Earned Income Tax Credit (EITC) Awareness Day, we want to make sure that everyone in the ACF community is aware of how EITC can have a positive impact on the lives of many of the people that we serve.
EITC is one of our nation's largest anti-poverty programs, annually lifting more than 6 million people out of poverty each year; half of those impacted are children. EITC does this by helping low to moderate income working individuals and families keep more of the money that they earn. In the 2012 tax year more than 27 million workers claimed some $63 billion EITC dollars. In 2013, EITC could be worth as much as $6,044 for some working families.
Millions of workers will qualify for EITC for the first time this year. Workers move into and out of eligibility based on changes in their marital, parental and financial status. It is estimated that one out of five eligible workers do not claim their EITC. According to the IRS, persons at risk for overlooking this important credit include many of the populations that we serve, such as those:
- Living in non-traditional homes, such as a grandparent raising a grandchild
- Whose earnings declined or whose marital or parental status changed
- Without children
- With limited English skills
- Living in rural areas
- Who are Native Americans
- With earnings below the filing requirement
- Who have disabilities or are raising children with disabilities
Families don’t have to go to a paid tax preparer to file and claim their EITC. There are free options to help workers determine their eligibility and file and claim their EITC:
- The online EITC Assistant at www.irs.gov/eitc helps workers determine their eligibility.
- The IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs offer free tax help for taxpayers who qualify. There are thousands of VITA sites located across the country. To find VITA sites in your area, use the VITA Locator Tool or call 1-800-906-9887. A majority of the TCE sites are operated by the AARP Foundation’s Tax Aide Program. To locate TCE or AARP Tax-Aide sites in your area use the AARP Site Locator Tool or call 888-227-7669.
- Low-income individuals can electronically Free File their returns and claim their EITC using brand name software products.
In addition to the federal EITC, we also encourage you to connect your communities to any similar state and local tax credits. Twenty-three states, plus local municipalities including the District of Columbia, New York City and Montgomery County, Maryland, are offering residents an earned income tax credit for 2013.
Finally, we want to highlight ACF’s Assets for Independence (AFI) program as an additional resource. EITC recipients are eligible to participate in this program and to benefit from a matched savings account and financial education resources to save for a first home, post-secondary education, or a small business. If you’re interested in partnering with an AFI grantee, check our locator to see if there is one near you.