Photo: Earned Income Credit
The Greater Los Angeles Earned Income Tax Credit (EITC) Campaign Partnership and United Way of Greater Los Angeles, the City and County of Los Angeles, the Office of the Controller John Chiang, and the IRS announced their annual effort to help qualified low and moderate-income families reach financial stability. The EITC partnership is part of a widespread national effort supported by The Bank of America Charitable Foundation, The Walmart Foundation, and Citi Community Development to drive public awareness about the tax credit and other services provided by participating organizations.
As the largest anti-poverty programs for working families, EITC brings an estimated $2 billion in refunds to qualified taxpayers nationwide, helping to subsidize family income and further drive the local economy in Los Angeles County. For 2012 (the 2011 tax year), the credit can translate to a refund of up to $5,751 for low and moderate-income families with three or more children – a figure equal to nearly two months of income for many families.
The EITC provides the following benefits for qualified working families:
Families with three or more qualifying children who earn less than $49,078 (or $43,998 for a single parent) are eligible for up to $5,751;
Families with two qualifying children who earn less than $46,044 (or $40,964 for a single parent) are eligible for up to $5,112;
Families with one qualifying child who earn less than $41,132 (or $36,052 for a single parent) are eligible for up to $3,094; and
Married workers between the ages of 25-64 who earn less than $18,470 (or $13,660 for single) and have no children are eligible for up to $464
“The EITC is a vastly underutilized benefit, with up to 20 percent of eligible taxpayers leaving $300 million in credits left on the table. Costs for basic needs like housing and food are on the rise, and wage growth is virtually non-existent,” said Elise Buik, president and CEO of United Way of Greater Los Angeles. “Last year our goal was to increase participation in EITC by ten percent, and we succeeded, helping residents claim over $38 million in total refunds. This year, we want to again increase participation in the program by another ten percent, which means almost 50,000 residents would get free tax assistance and help to claim money that is rightfully theirs, and back into our local economy.”
This year, EITC has been expanded to help qualifying families with three or more children with a larger credit worth up to $5,751. Those who qualify, but have failed to claim the credit in prior years, may also apply for the EITC retroactively for a period of up to three years.
Our comprehensive financial stability programs, which include free tax preparation, help working families establish and grow savings, which is very important to the health of the economy,” said Rick Kim, Economic Development Services Coordinator at Koreatown Youth and Community Center. “We’ve seen this effort be very positive for families and individuals, and it really helps them identify and achieve both short and long-term financial goals.”
In addition to the refund available through the EITC, the Child Tax Credit also provides families earning over $3,000, with dependent qualified children under 17 years old, the opportunity to receive credits of up to $1,000 per child. Free income tax preparation, supported by the EITC Partnership, can help families apply for these credits. Last year, the Partnership supported and promoted free income tax preparation at social services organizations that helped residents collect approximately $17 million in EITC (a 19 percent increase from the previous year) and $48 million in total tax refunds (a 21 percent increase from the previous year).
To qualify for the EITC, claimants must be qualified working U.S. citizens and individuals with valid Social Security numbers. If a U.S. resident meets all of the qualifications, they are also able to retroactively claim the EITC for a period of up to three years.
For more information, individuals and working families can call 1-800-906-9887 or visit the EITC Partnership’s website at www.FreeTaxHelpLA.com to find one of over 150 free tax preparation sites.