Transcript Earned Income Tax Credit (EITC)

Earned Income
Tax Credit (EITC)
Presented by:
Tempe Councilmember Dennis Cahill, Chair
Human Services Coordinating Committee
Nichole Ayoola, City of Mesa
Kate Hanley, Tempe Community Council
Wayne Tormala, City of Phoenix
What is the Earned Income Tax Credit?
Refundable tax credit for low-income working
individuals and families
Can be claimed if the individual does not owe
any tax at all
Up to $4,204 can be received for 2003
A first-time applicant can apply for 2001, 2002,
and 2003 – potential for total return of
approximately $10,000
Who qualifies for EITC?
Low-income workers – must have earned
income
Ages 25-64 (21 if children in household)
Single or married, with or without children
Requires a valid social security number
Non-citizen workers with Individual Taxpayer
Identification Numbers (ITIN) are not eligible
for E.I.T.C. but can receive Child Tax Credits
What’s in it
for us?
Why is EITC
a Win-Win
situation?
Mesa
What’s in it for Mesa residents?
Returns cash to hardworking individuals
and families
Allows dialogue about financial literacy
and encourages savings and asset building
What’s in it for the City of Mesa?
Method to assist low-income working families
gain education
Brings much-needed sales tax back to the
City at a time of declining resources
More About Mesa
$260,057 in EITC funds returned to Mesa
residents who used VITA sites (tax year 2002)
Over a half million dollars in total refunds (EITC
and other refunds) returned to Mesa residents
who filed with the assistance of VITA sites in
Mesa
548 Mesa families received free tax
assistance through VITA sites
Tempe
Tax Year 2002 statistics
$340,323 returned to Guadalupe &
Tempe residents who used VITA
and TCE sites
443 returns filed at VITA sites (not
all qualified for EITC)
More About Tempe
Needed – a strong City leadership role
The City of Tempe did all of the following:
Recruited volunteers from City staff
Allowed volunteer time for City
employees
Recognized volunteers
Provided space, hardware, and technical
help
Phoenix
Impact
35,000 workers are not receiving the
financial boost
$25-64 million of unclaimed EITC
EITC campaign involves:
Public awareness
Asset building education
Targeted communities
Who Benefits?
Working
Poor
Businesses
EITC
Local & State
Government
Banks
Employers
Revenue to your communities
Tax credit dollars help residents:
Pay monthly bills
Purchase major items
Automobiles
Homes
Pay tuition for themselves & their families
What resources are necessary to
develop a VITA site?
Early public awareness/community
mobilization
Computers
Volunteers
(IRS handles the tax training)
How can a city help market EITC?
Inform employees about importance of EITC
by placing inserts or notices in paycheck
envelopes
Reach out to:
 Chambers of commerce
 Workers without children
Non-English speaking communities
Market the program locally through cable
television, schools, municipal newsletters,
civic organization newsletters
Timeline Targets for EITC
December
-Flyers in employee paychecks
-Volunteer recruitment
January/February
-Train recruited volunteers
-Locate easy access facility for tax preparation
February
-Volunteers begin tax preparation
-Heavy marketing through local groups
The IRS is prepared to partner with any of the
municipalities. A special thanks to the following
people for being present today and available for
questions:
IRS:
Mary Burke, Sharon Taylor-Ward
To find out who the IRS contact is for your
community, contact Patrick Reidy, territory
manager, at 602-207-8684.
People from various municipalities are also willing
to talk to you about their EITC experiences:
Nichole Ayoola, City of Mesa
Kate Hanley, Tempe Community Council
Wayne Tormala, City of Phoenix