Monica Maggiano, Director, Campaign to Reduce Poverty in America
Jane Stenson, Senior Director for Human Services
John Wancheck, EIC Campaign Coordinator Center on Budget and Policy Priorities
Amelia Dalton, Senior Tax Analyst, Internal Revenue Service
Claudie Burchfield, Director of the Office of Economic Opportunity in Murphy, North Carolina
What is the Campaign to Reduce Poverty? Monica Maggiano
Introduction of EITC and Speakers Jane Stenson
Money Talks! Have you heard? John Wancheck Claim the Earned Income Credit
Questions and Answers
IRS Amelia Dalton
EITC outreach Claudie Burchfield
Questions and Answers
What is the Campaign?
Cut poverty in the United States by 50 percent by year 2020
Call upon the government to better serve the poor and improve public policies that strengthen and support families
Educate policymakers and the public about the struggles of those living in poverty
Engage those who are most impacted by government policies to be active participants in developing solutions to reducing poverty
Partner with individuals, government, and organizations to address poverty in our country
What can I do? Endorse the Campaign and take action!
Main Issue Areas
Family Economic Security
Catholic Charities USA supports tax policies that strengthen low-income families and individuals and address the needs of the poor and the vulnerable. This includes expanding the Earned Income Tax Credit (EITC), which is widely credited with lifting millions of families and individuals out of poverty every year.
Have you heard? Claim the Earned Income Credit
Money Talks! Have you heard? Claim the Earned Income Credit Presentation by: John Wancheck Organization: Center on Budget and Policy Priorities Outreach Kit! www.cbpp.org/eic2008 Phone: (202) 408-1080 Email: [email_address]
The Earned Income Credit (EIC)…
Represents up to a 40% pay increase for some workers
Can turn an $8 per hour job into a $10 per
In 2005, raised 4.1 million individuals — including 2.2 million children — above the poverty line
The EIC: Making a Difference Helping working families out of poverty, 2007 Full-time Minimum Wage Job* (less withholding) $10,805 Full-time Minimum Wage Job* (less withholding) $10,805 Food Stamps $1,812 Food Stamps $1,812 EITC $2,853 Without EIC With EIC Annual Income Estimated Poverty Line for Family of Two (including one child) $14,159 109% 89%
How Do Workers Benefit?
Single parent, 2 children, earns $14,000 Her EIC = $4,716
Single parent, 2 children, earns $18,000 Her EIC = $4,166
Married workers, 2 children, earn $25,000 Their EIC = $3,113
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Credit Amount The Federal Earned Income Credit in Tax Year 2007 Maximum benefit $4,716 Note: Married couples with income in the phaseout range qualify for a higher credit than single parents — shown by dashed lines. Maximum benefit $2,853 Maximum benefit $428 $40,000 Two or more children No children One child
EIC Benefits for Tax Year 2007 at Various Income Levels Note: This is not a tax table. Do not use this table to complete income tax returns. $3,740 $2,112 $0 $20,000 $4,582 $2,751 $0 $16,000 $4,716 $2,853 $0 $14,000 $4,716 $2,853 $43 $12,000 $4,010 $2,853 $196 $10,000 $3,210 $2,729 $349 $ 8,000 $2,010 $1,709 $384 $ 5,000 EIC for single workers raising two or more children EIC for single workers raising one child EIC for single workers not raising a child 2007 household income
How Much Can Workers Earn and Qualify for the EIC?
The average refund amount for families is $2,280.
Income limits for married workers who file their taxes jointly are $2,000 higher than these amounts.
Investment income cannot exceed $2,900.
For tax year 2007: $4,716 $37,783 2 or more children $428 $12,590 No children $2,853 $33,241 1 child EIC up to: Income less than: Number of children:
Definition of a “Qualifying Child” Age Residence Relationship Under 19, or under 24 if full-time student, or any age if totally and permanently disabled Must live with worker in the U.S. for more than half the year Son, daughter Stepchild, adopted child, grandchild Brother, sister, stepbrother, stepsister (or their descendents) Foster child placed by a government or private agency EIC
Why is outreach needed?
As many as 15-20% of eligible workers don't claim the EIC
70% of workers who claim the EIC pay commercial fees to file returns — can amount to over $300 or more in fees, draining about $1.4 billion out of EIC refunds nationwide
Includes the “unbanked”
Who’s Missing Out?
Workers at risk of missing out on the EIC include:
Parents just entering the labor force; self-employed
New parents — incl. foster and adoptive, kinship care
Divorced or separated parents
Homeless workers; dislocated workers
Workers not raising qualifying children
Parents with older disabled children
Workers who speak English as a second language
Workers not otherwise required to file a tax return
For Tax Year 2007:
$8,750 - single
$11,250 – head of household
$17,500 - married
Volunteer Income Tax Assistance (VITA)
Provides free tax filing help for low-income workers at community sites.
Sponsored by the IRS
In many communities across the country
Refunds deposited in 7-12 days through e-filing
Sites can help open bank accounts
Alternative to costly commercial tax preparation fees and Refund Anticipation Loans (RALs)
EIC Outreach Coalitions
Choose strategy, themes and materials for tax season outreach campaigns
Find partners to host Volunteer Income Tax Assistance (VITA) sites
Recruit VITA volunteers as preparers
Organize training for volunteers
Get information out to workers!
The Value of More Partners
Outreach coalitions divide campaign tasks; takes advantage of partners’ special capabilities and avoids duplication
Some partners are experienced reaching some parts of the community:
Ex. -- ethnic communities and businesses, family day care providers, people with disabilities
Finding an Outreach Coalition
Coalitions will have lists of VITA sites, flyers, etc.
Finding VITA sites for referral
Individuals: Call IRS 1-800-829-1040 (voice-mail option #1, then #5, gets you to an operator who has sites by zipcode).
Groups : call the IRS Territory Manager for a list
EIC Impact in the Community
Caddo Parish, LA
32% of all tax filers claimed EIC for 2004, bringing in nearly $74 million, plus over $17 million through the Child Tax Credit
If 20% of those eligible didn’t claim the EIC, nearly $10 million from the EIC may have been left in Washington instead of benefiting Caddo Parish.
Tax Preparation Fees and Loans
78% of Caddo Parish EIC filers used commercial preparers – higher than national rate.
About half of EIC filers also used expensive RALs.