Coinciding with the beginning of the 2014 tax season, today is officially National Earned Income Tax Credit Awareness Day. Even if you don't send out an e-card, take a moment to share about this important resource that supports more than 27 million working individuals and their families across America today.
Too many families in America hold down two or more full-time jobs, but still live in poverty or have to choose between basics like rent and food. The cost of housing, health care, child care, gas and other basics is far surpassing income in America. Almost half of all households in America earn less than $55,000. And one-third of low-wage families spend almost half or more of their income on housing.
That's why it's so important to promote awareness and strengthen the Earned Income Tax Credit (EITC), a tax credit to help low-wage working families keep more of what they earn. Research shows the tax credit encourages work, reduces poverty and leads to long-term gains in child health and educational success. It helped lift more than 6.6 million people -- half of them children -- out of poverty last year, experts say. Yet at the same time, an estimated 20% of those eligible do not claim the credit.
United Way leaders are promoting the importance of the EITC and asking elected officials to strengthen the EITC in the tax code, including partnering with national groups like the National Community Tax Coalition at a congressional briefing on Capitol Hill yesterday. At the same time, some 600 local United Ways across America are working to improve financial stability by helping low-wage families access free tax services to claim those tax credits, as part of United Way’s larger goal to build up communities by strengthening the building blocks of education, financial stability and health.
United Way donors are volunteering their time and professional services to help low-wage individuals file their taxes and claim relevant tax credits. For example, in Des Moines, volunteers help more than 1,000 people file their taxes each year. Here's a story from one of the volunteers: “Susan has 4 children, an income less than $30,000, and saved to buy a house last year. With her EITC, child tax credit, and first time home buyer's credit, she got a refund equal to 50% of her annual income. When I cautioned her that she might not see her return until June because of the first time home buyer's credit, and she just smiled and said, "That's worth waiting for!” Individuals and families can find out if they are eligible for the EITC here.
Nationally, United Way is also a partner in the MyFreeTaxes Partnership, which provides free state and federal tax preparation and filing assistance for people earning $58,000 or less a year. The MyFreeTaxes Partnership’s online and in-person tax preparation and filing services have helped millions of families claim nearly $6 billion in tax credits and refunds since 2009. Other partners include the Walmart Foundation, Goodwill Industries, and the National Disability Institute. (Details at www.myfreetaxes.com).
This EITC Awareness Day, make sure your friends and family are able to keep more of what they earn. Join us. Help spread the word about the EITC and free tax preparation tools through social media, or even, yes, an e-card.