It’s Earned Income Tax Credit Awareness Day! Are Your Eligible Residents Claiming the EITC?

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It’s EITC  (Earned Income Tax Credit) Awareness Day, giving city officials the chance to help their residents get the tax refund   they deserve.

Families across the country are working hard all year to pay their rent, keep the heat on and put food on the table. One of the best tools helping working families keep their household budgets on track is the EITC.

But, roughly 20 percent of eligible taxpayers don’t claim the EITC when they file their taxes.

This means they are leaving hard-earned money on the table and out of the local economy.

That’s a shame, because each year, the EITC provides a much-needed income boost to millions of low- and moderate-income families.

Last year, the EITC provided roughly $63 billion to 25 million eligible workers and families with an average payment of $2,488.

This tax season, families with two children who earned less than $45,802 (or less than $51,492 for married workers) are eligible for a credit of up to $5,716.

That is a significant amount for low-wage workers who are struggling to pay bills or provide for their families. It also injects federal dollars into neighborhoods and local economies.

Today offers an opportunity for elected officials, local governments, community organizations, schools, employers and other partners to come together to increase awareness of the EITC and other refundable tax credits that are available for eligible low- and moderate-income families.

It also offers city leaders the opportunity to connect with, celebrate and encourage residents to access the EITC through free tax filing services via the Volunteer Income Tax Assistance (VITA) program.

Altoona, Pennsylvania Mayor Matthew Pacifico see this as important effort on behalf of his constituents.

“We have to make sure every Altoona resident has the tools needed to move out of poverty and increase financial stability,” Mayor Pacifico said. “The EITC is a proven way to get money into the pockets of families. I am proud to help our residents learn about the EITC and connect them with VITA partners who will help them claim the tax credits.”

For more than 18 years, the National League of Cities’ Institute for Youth, Education, and Families (YEF Institute) has helped cities in implement EITC outreach campaigns.

These campaigns have raised the visibility of refundable tax credits like the EITC, and increased the participation of low- and moderate-income residents in free tax preparation through the VITA program.

As noted above, many families do not realize they are eligible to receive this refund. This potentially leaves hundreds or thousands of dollars on the table, which, if claimed by families could inject millions of dollars into local economies.

The combination of the EITC and savings generated by utilizing the VITA program’s free tax preparation services offer residents the best opportunity for financial success.

On average, families can save more than $200 dollars by having their taxes completed at a VITA site. These are real savings that will help increase the financial stability of families.

How Cities Can Help

The City of Dayton, Ohio, has a devoted staff person, as well as resource web pages to educate residents about the EITC.

The resource pages include income limits and credit amounts, tax filing information, and opportunities for residents to volunteer. The city highlights community events and lists VITA sites where residents can receive free tax preparation services, and which documents and materials they need to utilize the free tax services through VITA.

Dayton also created a form that residents can complete to become a VITA volunteer. After receiving the form, the city provides the required IRS training to volunteers and places the volunteers in local VITA sites.

In Altoona, Mayor Pacifico shares information about the EITC with residents through his monthly update newsletter. The update has included information on what the EITC is, how much the credit is worth to working families and the best way to find a VITA site within the city.

The Cities of Dayton and Altoona are both working to make sure that their residents know about and access the EITC. Both examples offer practical steps that other city leaders could take to help their residents and communities capture these resources.

To access the YEF Institute’s EITC Awareness Day toolkit, please click here.

To download NLC’s extensive Toolkit on Maximizing the Earned Income Tax Credit, click here.

For more information about EITC Awareness Day and EITC outreach campaigns, contact Patrick Hain at (202) 626-3099 or hain@nlc.org.

Patrick Hain smallAbout the author: Patrick Hain is principal associate for Financial Empowerment in NLC’s Institute for Youth, Education, and Families.