Lucas County residents offered free tax service
Toledo Blade - January 5, 2012
It’s part of a combined effort with Lucas County Commissioner Tina Skeldon Wozniak, Lucas County Treasurer Wade Kapszukiewicz and a number of social service agencies to help low to moderate income working people keep more of their refund.
“This is money that is owed to the working class and middle class citizens of our community,” said Mr. Kapszukiewicz. “They just need to know about it to take advantage of it.”
Many low-income people are owed a significant refund because of the Earned Income Tax Credit, or EITC, a federal income tax credit for low to moderate income working people.
But the IRS estimates anywhere from 10 percent to 20 percent of eligible families do not claim the credit, either because they don’t realize they are eligible or because their income is so low they believe they don’t have to file a tax return, said David Rothstein, project director of asset building for Policy Matters Ohio.
United Way officials are hoping to capture more local residents who are eligible by offering the free service.
“The idea is — you earned it, you keep it … It’s about stabilizing families and keeping the money in the household,” said Michelle Davis, United Way’s vice president, community outreach services. She emphasized tax clients will get their refund just as quickly as if they visit a paid tax preparer, and will get to keep all of it.
In the 2010 tax year, in Ohio, 942,000 families claimed the EITC for $2 billion, an average credit of $2,178 per family. Ohio ranks as the 7th largest EITC claiming state. In Lucas County, 40,750 families claimed the EITC for $92 million, an average credit of $2,263 per family, according to Internal Revenue Service statistics calculated by Policy Matters Ohio, a nonpartisan policy research organization.
There is no state-level EITC in Ohio, though 23 other states — including Michigan — have a state EITC, said Mr. Rothstein. Policy Matters has advocated for such a credit in Ohio.
In Michigan last year 809,560 people claimed the federal EITC, bringing $1.77 billion into Michigan, or an average of $2,191 per family, said Ross Yednock, director, asset building policy project for the Community Economic Development Association of Michigan, citing IRS statistics.
Elizabeth Kneebone, a senior research associate at the Brookings Institution, said the EITC, which began in 1975, has typically had broad bipartisan political support because it is an incentive for people to join the work force and an effective program for reducing poverty.
Those who qualify for the program — eligibility is based on income, marital status and number of children — could receive a federal credit of up to $5,751 for a family with three children.
“This can play a really important role for families, particularly in a difficult economy,” Ms. Kneebone said.
This is the seventh year the United Way and Lucas County has partnered to offer free tax service, said Mr. Kapszukiewicz. For the 2010 tax year, United Way’s IRS-trained volunteers prepared 1,758 tax returns, resulting in $831,375 in EITC for Lucas County residents.
Ms. Davis said United Way is pushing this year to make sure residents from more neighborhoods are included. Thousands of residents from the 43611, 43612, 43615 and 43620 zip codes were eligible for free tax filing last year and didn’t take advantage of it.
Mr. Kapszukiewicz, Ms. Wozniak and United Way officials hosted a press conference Thursday at the Toledo-Lucas County Public Library Reynolds Corners branch, in the 43615 zip code. More than 12,000 taxpayers are eligible in this area for free tax filing from United Way, yet last year none used it.
“It’s their money. And we need to help folks understand it is there for them to use,” said Bill Kitson, United Way president and chief executive officer.
What is the Earned Income Tax Credit?
The EITC, sometimes called EIC, is a refundable federal income tax credit for low to moderate income working people. It is one of the country’s largest anti-poverty programs. It was created in 1975 to offset Social Security taxes and also to provide an incentive to work. To qualify, you must file a tax return and meet certain requirements, including: having worked during the tax year and having a household income under $49,000. Credit amounts vary by number of children in the household and marital status. Those who qualify could be eligible to receive a federal tax credit of up to $5,751 for a family with three children.
Sources: IRS, Brookings Institution and Policy Matters Ohio
IRS Earned Income Tax Credit program page: irs.gov/individuals/article/0,,id=96406,00.html
United Way of Greater Toledo tax preparation info: unitedwaytoledo.org/taxprep or call 211 to schedule an appointment.