The Earned Income Tax Credit is the most effective poverty-fighting tool in the United States Tax Code. But as much as 20 percent of the population who qualifies for this tax credit does not know they are eligible and the credits could put thousands back in their pocket each year.
If you received income from working for someone or from running your own business or farm, you might qualify. You also must be a U.S. citizen for the entire tax year with a social number for yourself, and your spouse or children, if applicable. There are income limits which vary by household type, so read more about that here.
In Pennsylvania, 919,000 people claimed the Earned Income Tax Credit for tax year 2015. The average refund received by a Pennsylvanian was $2,271. That means the working people of our state claimed a total of $2.1 billion to support their families.
What do these dollars mean to working families? Research has shown most EITC refund recipients spend at least a portion of their refund immediately. Research also demonstrates that the funds are spent for a variety of reasons, including purchase and repair for cars that get people back and forth to work, clothes for their kids, housing expenses, and paying down credit card debt. Many families also bank a portion of their refund for emergencies.
United Way helps families with an annual income less than $54,000 to access these credits through Volunteer Income Tax Assistance (VITA) programs in many communities. VITA allows to get your taxes prepared for free by a trained volunteer. United Way also provides myfreetaxes.com, powered by H&R Block, and this is an online service available to anyone with an income of $64,000 or less to file their taxes for free. Seniors also can access free basic tax preparation in many communities. More information is available on UWP’s web site and you can find out the main contact point for VITA programs in most counties here.
This tax season, we need your help in two ways:
- Advocate to Expand the EITC. We know EITC works, yet some working Americans are excluded from the powerful, proven impacts of the EITC. In fact, about 7.5 million Americans, and 554,000 Pennsylvanians among them, are actually taxed into poverty largely because they are ineligible for the EITC or the EITC is too small. We can change that by raising our voices together – learn more and take action.
- Spread the Word – Help family and friends connect to the EITC. One in five who are eligible for the EITC are leaving money on the table – money that can make a big difference in paying bills and putting food on the table. Anyone earning $64,000 or less in 2016 can do their taxes for free at com and can connect any credits for which they are eligible.
By connecting local community members like Jesse to existing resources and advocating to expand what works, you can make a difference today. Please join us and #LiveUnited.