Earned Income Tax Credit
A letter from the Director of Community Services at United Way of Central Massachusetts
May 1, 2008
As you know, United Way has been very involved with the Worcester EITC Coalition. I was inspired yesterday as I attended the annual EITC volunteer recognition event. The room was filled with volunteers – nearly 50 participated in the program this year. Both the City of Worcester and the IRS presented special recognition certificates to volunteers and coalition partners for their outstanding commitment to this effort.
Together we returned more than $905,000 in federal tax refunds, including EITC to approximately 940+ low income, working Worcester residents (and the results are still filtering in). This does not count the dollars saved to taxpayers in the form of tax preparation fees and refund anticipation loans – an estimated $200,000.
As you can see, volunteers realized a huge economic impact through their efforts – more than 1 million dollars in the pockets of families who need it! And we continue to grow.
I want to extend a special thanks to Tim Brady for all of his hard work to make EITC even more successful than it was last year.
He is truly a dedicated professional and we are fortunate to have him working on this effort on behalf of United Way.
I am honored to participate in this program with Tim and the dozens of other organizations, businesses and colleges in Worcester.
Kerri
What is the EITC?
The EITC is a federal tax refund for eligible working individuals and households. Through the EITC Coalition, United Way of Central Massachusetts is making this tax credit more easily accessible to those who need it most.
You must have earned income to apply for the EITC. Households that qualify for the EITC could receive a tax credit refund of up to $4,700.
The EITC is a tax benefit for low to moderate-income working individuals and families. Workers who qualify for the EITC and file an income tax return can receive a refund, even if they had no income tax liability for the given year.
Why is the EITC important? Each year, low-income families substantially increase their annual income by utilizing the EITC. In fact, the EITC lifts more families out of poverty than any other federal aid program, providing families an opportunity to increase savings, reduce debt, and finance education or training programs. The EITC credits that go unclaimed by low-income workers represent millions of dollars of lost revenue that would otherwise boost local economies.
Reality of EITC losses: Each year, millions of EITC dollars go unclaimed. In addition, many who claim EITCs apply for Refund Anticipation Loans and end up pocketing less than half of the money they earned. These loans have interests rates as high as 74 percent.
Who is eligible?
Families with one child who earn less than $33,241 in 2007 (or less than $35,241 for married workers) are eligible for a credit of up to $2,853.
Families with two or more children who earn less than $37,783 in 2007 (or less than $39,783 for married workers) are eligible for a credit of up to $4,716.
Workers without a qualifying child who earn less than $12,590 in 2007 (or less than $14,590 for married workers) are eligible for a credit of up to $428.
How to claim the EITC
- Complete the Schedule EIC in the Federal 1040 or 1040A.
download here
- FREE: Take advantage of free tax preparation services. Known as Volunteer Income Assistance, or VITA, this program provides IRS-trained volunteers to prepare and file tax returns for free.
United Way's role
We are focused on financial stability: United Way is creating lasting community change by focusing on educational preparedness, Financial Stability and basic needs. Through the Earned Income Tax Credit Initiative, UWCM is addressing Financial Stability by helping taxpayers claim federal rebates.
What we’re doing: We are part of the Worcester EITC Coalition, which is working to create awareness about the EITC and engage volunteers to help prepare taxes for free. The Coalition recruits volunteers to serve at VITA sites and helps people claim eligible tax credits. We are also working to build awareness about financial issues such as predatory lending practices, pay day loans, and predatory tax preparation services that further hinder an individual’s ability to save and build assets.
Volunteer Income Tax Assistance (VITA) sites: VITA sites are sanctioned by the IRS and provide free tax preparation services and financial literacy counseling to qualifying individuals. Currently, only 1 percent of EITC tax returns are prepared at free sites.
To learn about EITC eligibility or to make an appointment call:
VITA (Volunteer Income Tax Assistance) sites:
Plumley Village
Resident Services Office
16 Laurel St. 01608
(508) 770-0508 / (508) 831-9835
(Spanish translation available)
Worcester State College
Center for Service Learning & Civic Engagement
Sullivan Building, 2nd Floor, Room 220
(508) 929-8635
486 Chandler St. 01602
Main South Community Development Corp
875 Main St. 01610
(508) 752-6181
(Spanish translation available)
|
