|
|
|
- The Earned Income Tax Credit was created in Congress in 1975 to help
low-income working families increase their financial stability. It is not a
welfare program. Its specific purposes are to:
- Reduce taxes for these workers,
- Supplement their wages, and
- Make work more attractive than welfare.
- The EITC is a credit that low-income working families may claim when
filing their annual income tax return with the Internal Revenue Service.
Eligible workers also may receive advance EITC payments during the year in
their paychecks.
- It is estimated that two out of three families in West Tennessee are
eligible to receive the Earned Income Tax Credit. However, only one in three
eligible families in West Tennessee actually file for the credit each year.
- While the credit depends on the filing status of the worker and the
number of children in the household, West Tennessee families who file for
the EITC receive an average credit of $1,800. The total area economic impact
is over $68,000,000 a year.
- Examples: A single parent making less than $35,263 and with two children
may be eligible for as much as $4,400. A married couple filing jointly with
an income of up to $37,263 and two children also may be eligible for a
$4,400 credit. Single workers or married couples with no children also may
be eligible for a small credit.
- If all eligible low-income working families actually filed for the EITC,
the total impact in West Tennessee would be over $175,000,000. That means
another $100 million could be going into the local economy and the budgets
of families who need it the most.
- Barriers to filing for the credit often include:
- Not knowing that they qualify,
- Not realizing they can be eligible for the credit even if they do
not owe income tax, and
- Incorrectly assuming that that the credit will impact their
eligibility for other benefits such as Medicaid, food stamps, SSI, or
subsidized housing.
- Research shows that many low-income working families use the credit on
expenditures that will result in greater financial stability (investing in a
home, purchasing a car to get to work, paying educational expenses, etc.)
For others, it provides relief during severe economic stress and is used to
pay back bills, buy groceries, avert utility shut-offs and eviction, etc.)
- The EITC is universally praised by business and government leaders as an
effective anti-poverty program that rewards work and helps low-income
working families move toward financial self-sufficiency.
For more information, call Tommy Schlindwein at United Way of West Tennessee
731-422-1816 or e-mail him at schlindwein@unitedway.tn.org
|
|
- VITA – Volunteer Income Tax Assistance
- VITA sites serve the population with an earned income less than $38,000.
- TCE – Tax Counseling for the Elderly
- As part of the IRS-sponsored TCE Program, AARP offers the Tax-Aide
counseling program to low-to-middle income individuals age 60 and older.
- Sites will prepare your taxes and send them electronically to the IRS
free of charge.
- The return time on refund checks will be much less than filing through
the mail system.
- Things you need to bring to a VITA/AARP site:
- Valid picture I.D. of taxpayer and spouse
- All W-2s, 1099s (if any), and any other sources of income
- Social Security Cards for all family members (or Individual Taxpayer
Identification Number Cards)
- Birthdates for primary, secondary and dependents on the tax return
- Childcare provider information & tax ID# (if any)
- Copy of the prior year’s tax return (if available)
- Voided bank check for direct deposit (optional)
- Valid telephone number
- IRS Hotline for VITA/AARP site information 1-800-829-1040
For more information, contact Tommy Schlindwein, United Way of West Tennessee
at 731-422-1816 or e-mail him at schlindwein@unitedway.tn.org
|
