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Earned Income Tax Credit: A Financial Tool for Head Start Families


New parents. Grandparents. Foster Parents. Parents raising disabled children ... IRS Taxpayer Assistance Centers extended hours ... Community Based Partnerships ... – PowerPoint PPT presentation

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Title: Earned Income Tax Credit: A Financial Tool for Head Start Families

Earned Income Tax Credit A Financial Tool for
Head Start Families
  • Head Start-IRS-SPEC
  • EITC Project
  • Region X
  • January 15, 2009

The Mission of the Project is to enhance
infrastructure development for EITC education and
to promote access to free tax preparation at
Volunteer Income Tax Assistance (VITA) sites by
launching a pilot program in 10 states.
10 Pilot States
  • Massachusetts
  • New Jersey
  • Pennsylvania
  • Indiana
  • Alabama
  • Oklahoma
  • Kansas
  • Colorado
  • Nevada
  • Oregon

IRS SPEC Mission
Stakeholder Partnerships, Education
To assist taxpayers in satisfying their
tax responsibilities by building and maintaining
partnerships with key stakeholders, seeking to
create and share value by informing, educating,
and communicating with our shared customers.
SPEC Customer Segments
  • Low Income
  • Persons with Disability
  • Rural
  • Limited English
  • Native American
  • Elderly

What is EITC?
  • Federal tax benefit designed to assist low and
    moderate income workers in increasing their
    financial stability
  • Reduces taxes for workers
  • Supplements wages
  • Makes work more attractive

What is EITC?
  • Largest federal aid program
  • EITC equal to TANF and Food Stamp Programs
  • Ten times the size CDBG program

Who is eligible for the EITC?
  • For Tax Year 2008, Earned income and adjusted
    gross income (AGI) must each be less than
  • 38,646 (41,646 married filing jointly) with two
    or more qualifying children
  • 33,995 (36,995 married filing jointly) with one
    qualifying child
  • 12,880 (15,880 married filing jointly) with no
    qualifying children.
  • Investment income must be 2,950 or less for the


How much is the EITC worth?
  • Tax Year 2008 maximum credit
  • 4,824 with two or more qualifying children
  • 2,917 with one qualifying child
  • 438 with no qualifying children.
  • The Advance Earned Income Tax Credit (AEITC) for
    TY 2008 maximum credit the employer is allowed to
    provide throughout the year with the employees
    pay is  1,750.

How Does the Credit Work?
A qualified individual MUST file an individual
tax return (whether income tax is owed or not)
and complete Schedule EIC (affirmative action

EITC Facts in Tax Year 2006
  • Claimed by over 22.6 Million working families and
  • EITC claims totaled over 43.2 billion
  • Average EITC refund is 1,800

More EITC Facts
  • The EITC is the most effective anti-poverty tool
    for working 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 an 9
    per hour job

Why is EITC Important to Head Start Families?
  • Transportation
  • Child care
  • Medical expenses
  • Food, clothing, etc.
  • Household expenses

Why is EITC Important to Head Start Communities?
  • EITC dollars are spent locally
  • 2007 EITC for Oregon 412,909,251.00
  • Local employers gain a more reliable, productive
    work force
  • Reduces demand for public assistance

How can EITC Benefit Head Start Offices?
  • Head Start Families Are Eligible
  • EITC can enhance Healthy Family Mission
  • Opportunities to join existing Local EITC Efforts

Why is EITC Important to All Eligible Families?
  • Research indicates that as many as
  • 25
  • of eligible families fail to claim the EITC
    they have earned.

Whos Missing Out On EITC?
  • Workers not required to file tax returns due to
    no tax liability - 16,400 for married couples
    10,500 for single parent with one child
  • Workers with low-income or a history of welfare
  • Workers without children
  • Workers who have recently lost jobs and may have
    never been eligible for the EITC before because
    their earned income was above the EITC threshold.

Whos Missing Out On EITC? (cont)
  • New parents
  • Grandparents
  • Foster Parents
  • Parents raising disabled children
  • Workers who have English as a second language
  • Eligible immigrants, especially Latino families

Outreach Day 2008 EITC Campaign
  • January 31, 2008 was last years National Outreach
  • 90 SPEC Partners held news conferences
  • 50 SPEC Partners issued press releases
  • Thousands of organizations provided EITC products
  • IRS Taxpayer Assistance Centers extended hours
  • 2 out of 3 SPEC Partners generated EITC news
  • Partner outreach was conducted through February
  • Outreach Messages
  • 1 in 4 eligible claimants do not claim
  • Free Tax preparation available
  • Split Deposit of Refund
  • Focus on Hispanic and Rural communities
  • Upcoming EITC National Outreach Day is January
    31, 2009

Earned Income Tax Credit
  • How do other organizations assist their clients?

Community Based Partnerships
  • Community Organizations With Common Interest Or
    Shared Commitment Of Helping Working Families
  • Emphasize Coordination of Existing Services,
    Leveraging of Community Resources and
    Collaboration In Assisting Working Families
  • Strategically Linking Asset Building
    Opportunities Is Key To Long Term Economic
    Self-Sufficiency for Working Families

Community Based Partnerships
Awareness and Education
Awareness and Education
Community- Based Organizations
Tax Preparation
EITC Claimants use Paid Preparers
Free Tax Prep Services
  • How can Head Start Families obtain the EITC?

Free Tax Prep Services
  • Many communities offer free tax prep services
  • Tax Counseling for the Elderly (TCE) program
  • Volunteer Income Tax Assistance (VITA)

Asset Building Opportunities
  • How can EITC refunds improve families
    financial well-being?

Head Start EITC Project
  • We want to help our families.
  • What Can We Do?

Local Head Start RolesEITC Outreach
  • Provide Tax Publications and IRS products in
  • Make fliers available at recruitment efforts,
    home visits, resource centers, program
    newsletters and parent involvement activities
  • Incorporate the Credit into the family assessment
    and partnership building process
  • Post information about the EITC in prominent
  • Provide EITC educational materials in mail out to
  • Head Start staff can learn about EITC to assist
    families with basic EITC eligibility screening

Local Head Start RolesFree Tax Preparation
  • Refer clients to local VITA sites-free tax prep
  • Assist clients with documents needed for tax prep
  • Coordinate translator needs
  • Provide locations and directions to VITA/Call 211
  • Consider offering free tax prep services
  • Provide a computer with public internet access
    for families to Free-File to IRS
  • Identify a mentor to assist families with
  • Advise families to file prior returns
  • Join existing community efforts

HS T/TA Providers Roles EITC Outreach and Free
Tax Preparation
  • Provide coordination of efforts between the HS
    Program Staff and the SPEC Tax Consultant

How Can SPEC Help Head Start Programs?
  • Provide IRS Tax Publications/products/links
  • Advise when state credit is available
  • Conduct workshops for HS staff
  • Provide listing of VITA site locations, hours,
    contact information
  • Identify translator needs in Head Start

Hqrt Coordinators Roles
  • Create and approve Project Plan
  • Identify the states
  • Communicate information to field
  • Feature EITC on the Homepage of the ECKLC
  • Add a link from the ECKLC Homepage to link to
    embedded tax information
  • Update all EITC on the ECKLC website
  • Assist SPEC and HS Staff participation in EITC
    Awareness Day
  • Prepare Activity Report at conclusion of Project

EITC e-Resources
  • 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.centeronbudget.org/eitc-partnershipdirectory.h
    tm (CBPP site to locate local coalitions)
  • www.tax-coalition.org (National Tax Coalition
  • www.brookings.org (Brookings Institute - key
    word EITC)
  • http//www.nhsa.org/program/EITC/index.htm (NHSA)

Phone Resources
  • Local IRS Locations- 800-829-1040
  • Tax Help Line- 800-829-1040
  • Refund Hotline 800-829-1954
  • VITA Site Locations
  • IRS Hotline 800-906-9887
  • United Way 211

IRS Contacts
  • Beckie Harrell, Senior Tax Analyst, Hqtrs
  • Phone 404-338-8325
  • E-mail Rebecca.Harrell_at_irs.gov
  • Amber Earnest, Tax Specialist, OR.
  • Phone 503-326-6565
  • E-mail Amber.Earnest_at_irs.gov
  • Barbara Sowder, Territory Manager, Area 4
  • Phone 503-326-2084
  • E-mail Barbara.R.Sowder_at_irs.gov
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