Real Economic Impact Disability Initiative

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Real Economic ImpactDisability Initiative

• Partnering to Increase Accessibility to Economic
  Services

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REIReal Economic Impact

• Real Economic Impact is a public-private
  collaboration designed to produce
• New opportunities to advance financial
  independence for Americans with disabilities
• Immediate market creation in over 50 cities
  nationwide for financial institutions and
• Measurable and sustainable economic growth
  defined by consumer spending and asset-building
  activities

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What is Earned Income Tax Credit (EITC)?

• The largest federal aid program benefiting
  working individuals and families
• EITC is approximately equal to Temporary
  Assistance for Needy Families (TANF) and Food
  Stamp Programs combined (in total dollars)
• Ten times the size of the Community Development
  Block Grant (CDBG) program
• 37 billion paid out in 2004 to over 21 million
  Individuals and Families

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More about EITC

• The EITC is the most effective anti-poverty tool
  for working individuals and families
• Lifts over 5 million individuals out of poverty
  each year, including 2.6 million children
• Has ability to turn a 7 per hour job into a 9
  per hour job

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History of EITC

• 1976 Congress enacted legislation
• Welfare to Work initiative
• Equalize wage withholding
• Congress enhanced credit several times
• Single parents became eligible in 1991
• Certain people, between the ages of 25 and 65 and
  without children, became eligible in 1994

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Why is EITC Important to Individuals and Families?

• Helps individuals keep working and caring for
  themselves and their children by allowing them
  to
• Pay for reliable transportation
• Secure convenient child care options
• Cover medical expenses
• Buy food and other basic necessities
• Keep current on rent and utility payments

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How the EITC WorksTax Year 2006
No Qualifying Children
One Qualifying Child
Two or More Qualifying Children
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Earned Income Tax Credit

• Now that we know what EITC is and why EITC is so
  important what can be done to assist
  individuals and families especially Persons with
  Disabilities (PWD)?

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Community Based Partnerships
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Community Based Partnerships

• The Model
• Outreach Reach eligible families not currently
  claiming tax credits/benefits
• Free Tax Preparation Preserve the value of the
  tax credits and benefits
• Asset Building Introduce financial literacy at
  tax preparation sites

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Disabilities and Poverty

• 33 Of adults with disabilities live in
  households with total income of lt15,000
  compared to only 12 of those without
  disabilities
• 58 of people with disabilities are asset poor
  (do not have enough resources to live at the
  federal poverty level for 3 months)
• Sources 2004
  N.O.D/Harris Poll 2000 U.S. Population Census

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Why is Tax Education Important for PWD?

• People with disabilities are not receiving EITC
• Concerns over interaction of disability benefits
  and tax filing
• Missing out on other tax benefits and credits

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Other Tax Credits or Benefits

• Child Tax Credit
• Credit for Elderly or Disabled
• Credit for Child and Dependent Care Expenses
• Medical expenses
• Impairment related work expenses

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Why Are Tax Preparation Services Important to PWD?

• Complexity of tax law
• Tax preparation fees erode the value of refunds
• Must file if they have earned income to receive
  refunds of credits and/or withholding
• Opportunity to link to asset building strategies

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Volunteer Return Preparation

• Many communities have free tax preparation
  services available
• Volunteer Income Tax Assistance (VITA) program
  (offered by various community groups, staffed by
  volunteers)
• Tax Counseling for the Elderly (TCE) program
  (offered by AARP as Tax Aide, with timing
  preference given to taxpayers 60 and older)

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Why are Asset Building Opportunities Important to
PWD?

• 54 of people with disabilities have no savings
  accounts and 69 do not have a checking account
• Persons with disabilities lack assets
• Growing interest in IDAs for people with
  disabilities

Sources 2004 N.O.D/Harris Poll 2000 U.S.
Population Census
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Real Economic Impact Campaign

• The purpose of the Real Economic Impact Campaign
  is to build knowledge and utilization of
  favorable tax provisions and financial education
  for individuals with disabilities, their families
  and employers to empower and advance
  self-directed economic security.

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Real Economic Impact Campaign

• Key Outcomes -
• Identify opportunities for collaboration in over
  50 cities at the local community level that
  increases participation of persons with
  disabilities, with EITC filing and other
  financial-related support services
• Expand opportunities and options to achieve
  economic independence and self-sufficiency for
  persons with disabilities, and their families
  through comprehensive tax and financial education
  services and technical assistance activities

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Why do we Need YOU to be Successful?

• XX is a Trusted Communication Channel in the
  Disability Community
• (XX) Can Reach This Targeted Segment
• (XX) is a Leader in the Disability Community

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What Can YOU do to Help?

• Join Existing Coalition Efforts
• Become Part of The Disability Workgroup
• Educate Clients
• Educate Employees
• Become a Free Tax Preparation Site

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First Year Successes

• Wichita
• Assisted 340 People With Disabilities in 2005
• Prepared 56 Tax Returns for People with
  Disabilities that had no Filing Requirements
• West Palm
• Distributed 150,000 Copies Regarding Their Tax
  Campaign that Included Information about
  Accessible Sites.
• Prepared 559 tax returns for People with
  Disabilities

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Resources

• www.irs.gov/pub/irs-pdf/p3966.pdf (IRS Disability
  Brochure)
• www.irs-eitc.info/SPEC (IRS site on EITC)
• www.cbpp.org (Center on Budget and Policy
  Priorities site and Access to EITC Toolkit)
• www.tax-coalition.org (National Tax Coalition
  site)
• www.brookings.org (Brookings Institution - key
  word EITC)