Thursday, January 28, 2010
A little knowledge about an often overlooked tax credit could mean a big difference in your bank account.
But many of those most in need may be unaware it even exists.
Two events Friday are intended to get the word out about the earned income tax credit and how it can boost low- to moderate-income working people and families.
A free tax-preparation event for Earned Income Tax Credit-eligible residents will be offered by the AARP Tax Aide program Friday. Additionally, the Walla Walla Asset Building Coalition will host a contest with a chance for EITC-eligible residents.
The hope is to draw attention to the anti-poverty credit that last year earned an additional $300,000 for more than 100 Walla Walla County households, said Noah Leavitt, coordinator of the Walla Walla Asset Building Coalition, in the announcement.
The fine print on the credit: The EITC is a benefit originally approved by Congress in 1975 to offset the burden of Social Security taxes and to provide an incentive to work, according to information from the Internal Revenue Service. When the tax credit exceeds the amount of taxes owed, it results in a refund to those who claim and qualify for it.
Those who meet the requirements must file a tax return even if they did not earn enough money to be obligated to file a return.
Determining eligibility is complicated, however. More than 20 separate determinations must be made. The most basic of these include having a valid Social Security number, not filing as "married filing separate," not filing certain forms, meeting the investment income limitation, not being the qualifying child of another person and more. For those eligible, the credit amount is based on income and family size.
The IRS estimates that 20 to 25 percent of qualifying workers miss out on thousands of dollars each year because they don't claim their earned income tax credit.
Many people don't know about the credit, and are difficult to reach, including those in rural communities, the elderly and those not proficient in English.
But Leavitt said the value in Walla Walla County is tremendous. Last year the total value of the tax credit in the community was about $7.7 million, which was generated from more than 3,900 households applying for the credit.
Last year was the first year that a focused effort was made to educate area residents about the credit during tax season. The effort was part of the work of the Walla Walla Asset Building Coalition, a now-2-year-old group sponsored by Blue Mountain Action Council. The coalition is one of 15 local networks around Washington whose primary goal is to help area residents think about, plan for, hold onto and work toward managing the dollars that come in and out of their households.
The organization is supported by the Department of Commerce, Gates Foundation and the First Fruits Fund of the Blue Mountain Community Foundation.
Friday's events commemorate national Earned Income Tax Credit Day. The final Friday of January was chosen to coincide with the day employers are required to provide employees with tax information.
Free tax help available
The AARP Tax Aide program will host the special clinic 1:30-4 p.m. Friday at Center at the Park, 720 Sprague Ave. Trained tax preparers will assist residents who believe they are eligible for the EITC file their returns. Those who want to file must bring all their income information, including W-2s and 1099s, Social Security cards, picture ID and a copy of their 2008 tax return, if they filed one. (The regular AARP Tax Aide program will begin next week at BMAC and Center at the Park.)
Contest sweetens deal
The Walla Walla Asset Building Coalition will partner with Super 1 and WalMart with a contest from 4 to 7 p.m. Participants will be asked "What will you do with your EITC this year?" A panel of community representatives will review the answers and select the most compelling, powerful responses. Winners will receive $100 gift certificates to the stores where the outreach tables will be located. Contestants must have a reasonable belief they are eligible for the tax credit and must be 18 or older. Judges are Rob Blethen, U-B publisher; Mayor Barbara Clark; Dr. Karen Hilgersom, Walla Walla Community College vice president for instruction; Walla Walla County Commissioner Gregg Loney; and Walla Walla Valley Chamber of Commerce CEO Dave Warkentin.