Catholic Charities USA Webinar:

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(No Transcript)
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• Catholic Charities USA Webinar
• The Earned Income Tax Credit
• Information and Outreach

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Presenters

• Monica Maggiano, Director, Campaign to Reduce
  Poverty in America
• Jane Stenson, Senior Director for Human Services
• John Wancheck, EIC Campaign CoordinatorCenter on
  Budget and Policy Priorities
• Amelia Dalton, Senior Tax Analyst, Internal
  Revenue Service
• Claudie Burchfield, Director of the Office of
  Economic Opportunity in Murphy, North Carolina

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Agenda

• What is the Campaign to Reduce Poverty? Monica
  Maggiano
• Introduction of EITC and Speakers Jane Stenson
• Money Talks! Have you heard? John Wancheck
  Claim the Earned Income Credit
• Questions and Answers
• IRS Amelia Dalton
• EITC outreach Claudie Burchfield
• Questions and Answers

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What is the Campaign?

• Goals
• Cut poverty in the United States by 50 percent by
  year 2020
• Call upon the government to better serve the poor
  and improve public policies that strengthen and
  support families
• Educate policymakers and the public about the
  struggles of those living in poverty
• Engage those who are most impacted by government
  policies to be active participants in developing
  solutions to reducing poverty
• Partner with individuals, government, and
  organizations to address poverty in our country
• What can I do? Endorse the Campaign and take
  action!

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Main Issue Areas

• Health
• Hunger
• Housing
• Family Economic Security
• Catholic Charities USA supports tax policies that
  strengthen low-income families and individuals
  and address the needs of the poor and the
  vulnerable. This includes expanding the Earned
  Income Tax Credit (EITC), which is widely
  credited with lifting millions of families and
  individuals out of poverty every year.

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• Money Talks!
• Have you heard? Claim the Earned Income Credit
• John Wancheck

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Money Talks! Have you heard?Claim the Earned
Income Credit

• Presentation by John Wancheck
• Organization Center on Budget and Policy
  Priorities
• Outreach Kit! www.cbpp.org/eic2008
• Phone [phone]
• Email wancheck_at_cbpp.org

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The Earned Income Credit (EIC)

• Represents up to a 40 pay increase for some
  workers
• Can turn an 8 per hour job into a 10 per
• hour job
• In 2005, raised 4.1 million individuals
  including 2.2 million children above the
  poverty line

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The EIC Making a Difference
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How Do Workers Benefit?

• Single parent, 2 children, earns 14,000 Her
  EIC 4,716
• Single parent, 2 children, earns 18,000 Her
  EIC 4,166
• Married workers, 2 children, earn 25,000 Their
  EIC 3,113

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The Federal Earned Income Credit in Tax Year 2007
5,000
Maximum benefit 4,716
4,000
Maximum benefit 2,853
3,000
Credit Amount
2,000
Maximum benefit 428
1,000
0
40,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Note Married couples with income in the phaseout
range qualify for a higher credit than single
parents shown by dashed lines.
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EIC Benefits for Tax Year 2007 at Various
Income Levels
2007 household income EIC for single workers not raising a child EIC for single workers raising one child EIC for single workers raising two or more children
5,000 384 1,709 2,010
8,000 349 2,729 3,210
10,000 196 2,853 4,010
12,000 43 2,853 4,716
14,000 0 2,853 4,716
16,000 0 2,751 4,582
20,000 0 2,112 3,740
Note This is not a tax table. Do not use this
table to complete income tax returns.
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How Much Can Workers Earn and Qualify for the EIC?
For tax year 2007
Number of children Income less than EIC up to
1 child 33,241 2,853
2 or more children 37,783 4,716
No children 12,590 428

• The average refund amount for families is 2,280.
• Income limits for married workers who file their
  taxes jointly are 2,000 higher than these
  amounts.
• Investment income cannot exceed 2,900.

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Definition of a Qualifying Child
EIC
Relationship Son, daughter Stepchild, adopted child, grandchild Brother, sister, stepbrother, stepsister (or their descendents) Foster child placed by a government or private agency
Residence Must live with worker in the U.S. for more than half the year
Age Under 19, or under 24 if full-time student, or any age if totally and permanently disabled
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Why is outreach needed?

• As many as 15-20 of eligible workers don't claim
  the EIC
• 70 of workers who claim the EIC pay commercial
  fees to file returns can amount to over 300 or
  more in fees, draining about 1.4 billion out of
  EIC refunds nationwide
• Includes the unbanked

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Whos Missing Out?

• Workers at risk of missing out on the EIC
  include
• Parents just entering the labor force
  self-employed
• New parents incl. foster and adoptive, kinship
  care
• Divorced or separated parents
• Homeless workers dislocated workers
• Workers not raising qualifying children
• Parents with older disabled children
• Workers who speak English as a second language
• Workers not otherwise required to file a tax
  return
• For Tax Year 2007
• 8,750 - single
• 11,250 head of household
• 17,500 - married

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Volunteer Income Tax Assistance (VITA)

• Provides free tax filing help for low-income
  workers at community sites.
• Sponsored by the IRS
• In many communities across the country
• Refunds deposited in 7-12 days through e-filing
• Sites can help open bank accounts
• Alternative to costly commercial tax preparation
  fees and Refund Anticipation Loans (RALs)

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EIC Outreach Coalitions

• Choose strategy, themes and materials for tax
  season outreach campaigns
• Find partners to host Volunteer Income Tax
  Assistance (VITA) sites
• Recruit VITA volunteers as preparers
• Organize training for volunteers
• Get information out to workers!

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The Value of More Partners

• Outreach coalitions divide campaign tasks takes
  advantage of partners special capabilities and
  avoids duplication
• Some partners are experienced reaching some parts
  of the community
• Ex. -- ethnic communities and businesses, family
  day care providers, people with disabilities

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Making Connections

• Finding an Outreach Coalition
• www.cbpp.org/eitc-partnership/directory.htm
• Coalitions will have lists of VITA sites, flyers,
  etc.
• Finding VITA sites for referral
• Individuals Call IRS 1-800-829-1040 (voice-mail
  option 1, then 5, gets you to an operator who
  has sites by zipcode).
• Groups call the IRS Territory Manager for a list
  
• www.cbpp.org/eic2007/territorymanager2007.pd
  f

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EIC Impact in the Community

• Caddo Parish, LA
• 32 of all tax filers claimed EIC for 2004,
  bringing in nearly 74 million, plus over 17
  million through the Child Tax Credit
• If 20 of those eligible didnt claim the EIC,
  nearly 10 million from the EIC may have been
  left in Washington instead of benefiting Caddo
  Parish.
• Tax Preparation Fees and Loans
• 78 of Caddo Parish EIC filers used commercial
  preparers higher than national rate.
• About half of EIC filers also used expensive RALs.

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Local EIC Claims Data

• Brookings Institution interactive website
  www.brookings.edu/metro/EITC/EITC-Homepage.aspx
• Zip Code-level data
• Statistics on EITC, CTC, RALs, income levels of
  filers.. much more..

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Do the EIC/CTC Affect Other Public Benefits?

• EIC not income for specified federal programs
  including
• Food stamps Medicaid
• SSI Veterans benefits
• Public housing Head Start
• States generally dont count EIC for TANF or
  SCHIP. Some count it for child care and energy
  assistance.
• CTC
• Not income for any federal, state or local
  program financed even in part with federal funds

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Resource rules

• Programs have different rules about how long the
  EIC or CTC refund can be saved before it counts
  against program resource limits.
• All programs exclude EIC/CTC as a resource for at
  least one month after the month the refund is
  received.
• Food stamps not counted for 12 months
• SSI not counted for 9 months
• IDAs are a safe harbor.

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Advance EIC Get the Most out of Every Paycheck

• Some workers raising children can get the Advance
  EIC in their paycheck and get a year-end refund
  too!
• Increase take-home pay up to 130 p/month.
• Workers must file IRS Form W-5 with their
  employer to start Advance EIC payments.

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Additional Tax Credits

• Child Tax Credit (CTC)
• The CTC is worth up to 1,000 for each qualifying
  child under age 17
• Workers who earned more than 11,750 in 2007 can
  get a CTC refund
• Child and Dependent Care Credit (DCTC)
• Federal tax credit for expenses to care for a
  young child, or a dependent with disabilities, in
  order to work. Credit only reduces income tax.
• Maximum expenses
• 3,000 for one dependent, 6,000 for two or more

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How Do Workers Benefit?

• Single parent, 2 children, earns 14,000 Her EIC
  4,716 CTC 338 5,054
• Single parent, 2 children, earns 18,000 Her EIC
  4,166 CTC 938 5,104
• Married workers, 2 children, earn 25,000 Their
  EIC 3,113 CTC 2,000 5,113

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IRS- EITC

• Amelia Dalton
• Senior Tax Analyst, Internal Revenue Service

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Spotlight on an Agency

• Link between Financial Literacy and EITC
• Claudie Burchfield
• Director of the Office of Economic Opportunity in
  Murphy, North Carolina

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Questions and Answers

• Amelia.Dalton_at_irs.gov
• 1-404-338-8945

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• Thank you for participating!
• Please complete the survey at the end of the
  webinar!