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Taking Credit: Boosting Participation in the Earned Income Tax Credit in Greater Cleveland
This 2004 report finds that more than 7,800 tax filers in the city of Cleveland
and more than 14,600 tax filers in Cuyahoga County who do not currently
claim the Earned Income Tax Credit (EITC) may be eligible to receive the
credit. Getting these households to file could bring an estimated
additional $34 million in federal money to families in this Metropolitan
Statistical Area. The
EITC is a refundable tax credit available to low-income workers. For
example, four-person families earning as much as $34,780 and single adults
earning up to $11,230 are eligible. Taking
Credit: Boosting Participation in the Earned Income Tax Credit in Greater
Cleveland, a September 2004 study by Policy Matters Ohio, reports
that in tax year 2002, 726,000 Ohio families received an average EITC of
$1,700 to bring a total of more than $1.2 billion in federal refund money
to the state. The credit can be as large as $4,204 and can boost earnings
by as much as 40 percent. However,
the report finds that many eligible families are not filing for the
credit, and that many of those who do are paying large sums for someone
else to prepare their tax return. Further, 46.9 percent of Cuyahoga County
claimants purchase exploitative refund anticipation loans (RAL), which
siphon money away from the low-income workers. The report recommends that the state of Ohio implement legislation to regulate RAL providers as four states and the city of New York have done. The report also makes recommendations for how Cuyahoga County, the city of Cleveland and inner ring suburbs can increase participation by informing citizens about the credit, about the high costs of RAL, and about the existence of free volunteer tax preparation sites.
Free Tax Service Saves Working Families Money Cleveland Plain Dealer, April 14, 05
Credit Low Wage Earners Deserve Cleveland Plain Dealer, January 23, 05
Workers Need Tax Assistance, Report Says Cleveland Plain Dealer, September 17, 04
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