EITC Awareness Day

Once a year at the end of January the Internal Revenue Services and its partners do a one day media event to advertise the Earned Income Tax Credit program, a tax program that has been around since the Nixon Administration. Today, January 27, 2017, is another EITC Awareness Day.

The good points about EITC are that it provides tax relief for low and moderate income working families. The IRS even encourages people to take advantage of it. They partner with software companies to make tax filing free to many households. Checkout Free File. EITC tax refunds lift millions out of poverty and make life a little easier.

The bad news is that one out of five households do not take advantage by claiming the Earned Income Tax Credit. In New Jersey, an estimated 197,000 taxpayers are losing out of an average EITC refund totaling approximately $2350. Do the math – unclaimed tax refunds equal to $462 million. To make matters worse, New Jersey once was recognized as a leader of EITC but now has sunk to near bottom, 45th among 50 states, in the EITC participation rate ranking. See https://www.eitc.irs.gov/EITC-Central/Participation-Rate.

Here are a few tips. To find a free tax preparation site (generally if you make $54,000 a year or less) visit either NJ 2-1-1 Partnership’s NJ VITA Sites or IRS Get Free Tax Prep Help Page or the AARP Tax-Aide Locator.

To first find out if you qualify, visit the EITC Assistant. By answering all the questions you can find out if you are eligible for EITC. The tool also provides an estimate of the amount of your credit.

Employers have a responsibility to let their workers know about this program. They should be distributing a notice titled, “Have You Told Your Employees About the Earned Income Credit (EIC)?” Ask your employer to runoff copies and attach it to W-2 statements.

There are a number of web sites useful to IRS partners, employers, government agencies/offices and nonprofits. These website provide outreach material, flyers and other social media tools. They include: Center on Budget and Policy Priorities’ Get It Back Campaign and EITC Central. County welfare agencies and One Stop Career Centers distribute the Division of Family Development’s 2016 EITC Fact Sheet.

EITC Awareness Day – can you afford to do without it?

Other useful tax preparation assistance information is available at the NJ Community Resources website.

EITC Awareness Day – January 25, 2013

EITC Awareness Day is a one-day blitz for mainstream and social media to reach the broadest possible range of potentially eligible taxpayers. In 2012, 26.5 million low and moderate income households received $60.7 billion under the Earned Income Tax Credit. If you worked and had income under $50,270 find out if your are eligible for EITC.

There are a number of contact points to determine if you qualify. They include calling the Internal Revenue Service at 1-800-829-1040 or the New Jersey Division of Taxation at 888-895-9179. In New Jersey you can call the 2-1-1 Partnership by dialing 2-1-1 or 877-652-1148 to get free help filing your taxes.

Free help in preparing your tax return – you can claim EITC even if you had nothing withheld from your paycheck – is available through the AARP Foundation Tax-Aide or at Volunteers in Tax Assistance (VITA) sites throughout New Jersey and nationwide. The 2-1-1 Partnership maintains a list of VITA and AARP Tax Assistance Sites in New Jersey.

Also, a number of organizations in and near New Jersey promote EITC and provide free tax preparation service to qualifying individuals and families. They are:
Mercer County CASH Campaign
Newark Now
New Jersey Citizen Action
Our neighbors in Philadelphia can also contact either Ceiba or Campaign for Working Families.

Nonprofit organizations that wish to become actively involved in promoting EITC should contact either the Center on Budget and Policy Priorities or the National Community Tax Coalition.

Additional details and web links are available on New Jersey Community Resources website on the Earned Income Tax Credit page.

To claim your EITC tax credit you must file a tax return.

EITC Awareness Day – January 27, 2012

The Internal Revenue Service has declared January 27, 2012 as Earned Income Tax Credit (EITC) Awareness Day. It is a program enacted in 1975 during the Nixon Administration and expanded during the Reagan years. Although technically a tax program, it is considered one of the principal social programs for working families. Nationally, in 2011 over 26 million taxpayers received $59 billion in EITC tax refunds. EITC rewards work and reduces poverty.

An IRS spokesperson recently stated, “If you worked any part of last year (2011) and your income was around $49,000 or less see if you qualify for the Earned Income Tax Credit, or EITC.” It can put extra money in a family’s pocket, up to $5700. In New Jersey in 2011 552,000 households received $1.17 billion via the EITC credit, with an average refund of $2,117. For a single parent with one child it is estimated that EITC effectively raises wages by $1.25 an hour.

An EITC Tax Tip Video makes a number of suggestions. They include:
1) Use free brand name tax software through IRS’ Free File program if your adjusted gross income is $57,000 or less. For details visit the IRS Free File: Do Your Federal Taxes For Free page.
2) Utilize the services of any of the 400 nationwide IRS Taxpayer Assistance Centers to get face-to-face tax help. In New Jersey there are twelve local offices located in Cherry Hill, Edison, Fairfield, Freehold, Jersey City, Mays Landing, Mountainside, Newark, Paramus, Parsippany, Paterson, and Trenton. Visit the link for locations and telephone numbers.
3) Take advantage of local and free tax preparation sites – known as VITA or AARP Tax-Aide sites – during the tax season. For a comprehensive and up-to-date list of New Jersey tax assistance sites visit the NJ 2-1-1 website. To locate the nearest VITA site, call 800-906-9887, if you do not have Internet access. In New Jersey, dial 2-1-1 or 877-652-1148 to find the closest free tax preparation site.

There are a couple tips that I also would like to pass on. They fall into the category of consumer protection and financial literacy. Does it make sense to pay $100 or even $200 to a commercial tax preparer if you can have your tax preparation done for free and get your refund via direct deposit? You should be familiar with the term “rapid refund” and currently known as a “refund anticipation check”. They are nothing more than expensive loans. In the consumer affairs community these services are known as Refund Anticipation Loans or RALs. For a good explanation of how expensive RALs are see a recent National Consumer Law Center report. Fortunately, 2011 may be the last year in the life of these loan schemes.

In the past couple years a number of VITA programs have partnered with financial institutions to enable tax filers to open accounts with the idea of getting a tax refund quicker via direct deposit. New Jersey consumers are fortunate in having available to them low-cost, low-volume basic checking services known as New Jersey Consumer Checking Accounts. If you want to promote financial literacy and encourage consumer education spread the word about consumer checking accounts.

For additional information on tax preparation programs and organizations that sponsor them, visit the New Jersey Community Resources’ NJ Earned Income Tax Credit web page.