Over the past year, Neighborhood Partnerships has worked with Oregonians for Working Families and Oregon Thrives to encourage Oregon legislators to expand our state’s Earned Income Tax Credit (EITC). We want to expand the tax credit because it has a track record of successfully helping families who are struggling to make ends meet. In 2009 the EITC lifted over six million people in the United States out of poverty including more than three million children. It lifted more children out of poverty than any other single program or category of programs. The EITC is widely seen as one of the largest and most effective wage support programs for low and moderate income families.
In spite of its importance for low and moderate income workers, millions of eligible workers miss out on the EITC each year because they do not know they qualify, do not know how to claim the credit or do not know where to find free tax filing assistance. Your outreach efforts can ensure that eligible workers receive the tax credits they’ve earned. As tax season is upon us, please help spread the word about Oregon’s free tax preparation sites.
What is the EITC?
The EITC is a tax credit for low and moderate income working people. It is designed to supplement the earnings of low and moderate income workers by reducing their tax burden. In addition, the EITC is refundable, which means if the credit is greater than the amount of taxes owed the taxpayer receives a refund. Because the credit has a track record of successfully combating poverty, 24 states—including Oregon—have established state EITCs to enhance the federal credit.
A recent study found that nearly half of all families with children will receive the EITC at some point. In addition to reducing poverty, the EITC is an immediate economic stimulus. Research shows that families use the EITC to pay for necessities, repair homes, maintain vehicles needed to commute to work, and in some cases, pursue additional education or training to boost their earning power.
The amount of the credit depends on both the amount of earned income and the number of qualifying children in the household. For tax year 2009, the EITC can be as much as $5,657 for households with three qualifying children; phasing out at roughly $48,000 AGI (Annual Gross Income). The IRS website has a tool that allows you to determine whether or not you are eligible for the EITCExpansion
In partnership with Oregonians for Working Families, Neighborhood Partnerships continues to advocate for an expansion of the state EITC. We have called on the state to increase the value of Oregon’s credit to 18% of the federal credit. In addition, the national organization CFED has also
Help Spread the Word Today
Please take some time to plan on how you can get the word out to your friends, neighbors and colleagues who may be EITC eligible. By working together we can help spread the word about free tax preparation services and the EITC to more Oregonians than ever.