Earn It. Keep It. Save It.

A Campaign for Working Families

Types of Tax Credits

• Refundable Credits – Taxpayer receives full amount of credit they are entitled to, whether or not they have tax liability.

• Non-refundable Credits – Taxpayer receives maximum amount of credit allowed or a credit equal to their tax liability whichever is less.

What is the Earned Income Tax Credit?

• The EITC is a federal tax credit for working individuals and families • It reduces the amount of income tax liability • It could add hundreds or thousands of dollars to the income tax refund • MD State also has an EITC.

How much is the EITC worth?

Refundable Credit for working taxpayers with Earned Income and Adjusted Gross Income (AGI) of less than: •$36,348 ($38,348 married filing jointly) with 2 or more qualifying children •$32,001 ($34,001 married filing jointly) with one qualifying child, or, •$12,120 ($14,120 married filing jointly) with no qualifying children Maximum Credit (for 2006 tax year) for 2 or more qualifying children $5,443 1 qualifying child $3,296 No children $412

EITC Qualifications

 Taxpayer must have earned income (income from work)  Investment income (interest, dividend income) must be less than $2,800 or less for the year  Taxpayer, spouse and all qualifying children must have SSN (ITIN holders do not qualify)  Taxpayer, spouse and all qualifying children must be U.S. resident or resident alien for entire year  Filing status cannot be Married Filing Separately  Taxpayer, spouse and qualifying children cannot be the qualifying child of another taxpayer

Telephone Excise Tax Refund

• One time refund in 2006 for reimbursement of Federal excise taxes paid on phone bills between 2003 - 2006 • Refund amount based on number of household exemptions listed on tax return • Refund amount ranges from $30 to $60 • Taxpayers who are not required to file tax returns may also receive this refund – simplified form available

Child Tax Credit

• Partially refundable, partially non-refundable.

• Maximum credit is $1,000 per qualifying child for tax year 2006.

• For all taxpayers with adjusted gross incomes of less than $55,000 (may be higher based on filing status) • Qualifying child must – be under the age of 17 on Dec. 31, 2006 – be a U.S. Citizen, national, or resident (ITIN eligible) – have lived with the taxpayer more than half of 2006 (183 days) – not have provided more than half of their own support • Special rules for divorced or separated parents

Child and Dependent Care Credit

• Non-refundable credit • Most commonly used credit in U.S.

• Credit is for expenses paid for care so taxpayer could work or look for work • Person being cared for must be: – the taxpayer’s dependent child

(there are specific definitions for dependent)

– the taxpayer’s dependent or spouse who is not physically or mentally capable of self-care

Free Tax Preparation Sites…

1. Provide

free tax preparation services:

2. Are located right in the community. 3. Are staffed by volunteers trained by the IRS 4. Specialize in working families’ taxes, including

Earned Income Tax Credit

...

5. Connect taxpayers to other asset building opportunities

Baltimore CASH Campaign Sites

• 15 sites throughout Baltimore City and Baltimore County • Eligibility: •Slightly varies from site to site, but taxpayers earning under $40,000 (within the EITC guidelines).

•Two sites provide low-cost services for filers who are outside of the eligibility guidelines (Bon Secours and EHCDC) • Open the week of January 20, 2007 • Close from Mid-March to April 15 th • Appointments: 410-234-8008 (open Jan 2, 2007) •

Some sites allow for drop-ins. Flyer will contain details.

Money Power Day!

Money Power Day 2007 is a financial fitness fair:

•

Free tax preparation

preparation to clients – provides free tax and low-cost •

Credit Café

– assistance in pulling free credit reports and receiving one-on-one counseling •

Training and education

– workshops on everything from starting a small business to identity theft •

Exhibitor Hall

– opportunities to meet with financial service professionals and other service providers to receive on-site assistance

Important Dates to Remember

 January 2 nd : CASH scheduling lines open 410-234-8008  January 9 th : Tax Credit Training  January 20 th -27 th : All CASH Campaign sites open 

February 24 th : MONEY POWER DAY!!!

 March 4 th – April 15 th : CASH Sites close down  April 17 th : Maryland and Federal Taxes Due  Spring 07: Financial Counseling Certification Course  Summer 07: Property Tax Credit Clinic

Year-Round Resources for Clients Baltimore CASH Campaign

Joanna Smith-Ramani, Director Pam Chaney, Operations Director www.baltimorecashcampaign.org

First Call for Help (can refer to year-round tax preparation assistance)

410-685-0525 or 211

Tax Disputes or back tax preparation

Low-Income Taxpayer Clinic Maryland Volunteer Lawyers Service 410-547-6537 800-510-0050

Take The Money! You’ve Earned It.

This presentation is provided by the Baltimore CASH Campaign.

The Baltimore CASH Campaign pledges to: •Promote greater awareness of the EITC among low-income families, •Advance free tax preparation and the avoidance of unnecessary charges, •Incorporate the use of tax refunds as part of an overall asset-building strategy, and •Advocate for working families in the Baltimore area.

Joanna Smith-Ramani, Director Baltimore CASH Campaign One North Charles Street, Suite 222 Baltimore, Maryland 21201 Phone: 443-451-4079 [email protected]

Pam Chaney Baltimore CASH Campaign One North Charles Street, Suite 222 Baltimore, Maryland 21201 Phone: 410-292-0018 [email protected]