Earned Income Tax Credit Report

by journojames on April 12, 2012

Originally published Feb. 7, 2012

Mayor Villaraigosa near downtown L.A., Photo by JournoJames

LOS ANGELES, CA – Free tax preparation services will be offered to low-income working families as an incentive to join an underutilized program that provides refunds which could help boost the local economy, Mayor Antonio Villaraigosa announced Monday.

“In tough economic times like these, we need to make sure hard-working Angelenos are getting all the help they need,” Villaraigosa said. “Our message is simple: get the free help that you deserve.”

He said that not enough working families were taking advantage of the Earned Income Tax Credit (EITC) resource. He said offering this free service was an attempt to encourage more low and moderate-income households to participate in it.

The IRS estimated that Los Angeles County households failed to claim nearly $300 million in EITC credits last year.

Villaraigosa said that this unclaimed money could have helped empower many families who struggled daily to make ends meet and could have helped change lives for the better.

State Controller John Chiang, who attended the announcement with Villaraigosa, said that these tax credits could go beyond helping families and individuals.

“EITC has a powerful impact on the state’s economy,” Chiang said. “Money not claimed is money lost to Los Angeles and California’s economy. It just goes to the federal government and they usually spend it.”

Photo courtesy of newsantaana

Jerome Horton, chairman of the state Board of Equalization, agreed with Chiang.

“Every year, about 800,000 individuals fail to claim their income tax credit,” Horton said. “That represents somewhere around $1.2 billion in additional federal revenue that we can recapture here in the state of California.”

Last year, the EITC Campaign increased participation by 10 percent, helping residents claim over $38 million in total refunds, according to Elise Buik, president and CEO of United Way of Greater Los Angeles.

“This year, we want to again increase participation in the program by another 10 percent,” said Buik. “This means almost 50,000 residents would get free tax assistance.”

The EITC is one of the nation’s largest anti-poverty programs for working families. To qualify, applicants must be working U.S. citizens and individuals with valid Social Security numbers who have lived in the U.S. for more than half the year.

EITC provides several different options of benefits for qualified families and individuals.

For families with two parents and three or more qualifying children who earn less than $49,078 ($43,998 for families with a single parent), they are eligible for up to $5,751 in tax refunds and services — that is equal to nearly two months of income for many families.

There are many reasons why families don’t file or claim their EITC.

Chiang said that there are over ten-and-a-half million words between the federal and state tax filing documents. He said that many people just don’t know about it or get so confused and frustrated, they don’t inquire or apply.

Photo courtesy of semissourian

In other instances, people think they make such a small amount of money, they don’t even bother filing or are afraid of the stigma that comes along with seeking government assistance.

And in Los Angeles, many of the low-income households are Latinos or undocumented immigrants who are apprehensive to report anything to the federal government.

Villaraigosa said the free tax service, conducted by trained volunteers, would be available at all 21 FamilySource Centers in the city of Los Angeles.

FamilySource Centers work as the city’s anti-poverty system, providing a number of social services to residents in need, including educational and cultural services.

For more information, working individuals and families can visit the FamilySource Center website at cdd.lacity.org/fam_fsc.html or call 1-800-906-9887 or visit the EITC Partnership’s website at www.greaterlaeitc.org.

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