2010 Tax Year Earned Income Tax Credit Presented by The Thomas Jefferson Area Earned Income Tax Credit Coalition

Agenda About the Thomas Jefferson Area Earned Income Tax Credit Coalition About the EITC Coalition Coalition Partners Introduction to the Earned Income Tax Credit (EITC) Who is eligible Where your employees can go for free tax preparation How to help your employees through successful EITC education strategies Questions & Answer Why EITC Matters

About our Coalition In 2007, Virginia Delegate David J. Toscano initiated a local coalition to coordinate efforts and reach all community members eligible for the Earned Income Tax Credit (EITC). Community agencies, businesses, and local government are all part of the coalition.

About our Coalition The partners of the local coalition provide: Free tax preparation for eligible taxpayers through the IRS Volunteer Income Tax Assistance (VITA) program. Education and outreach to share information about how to claim the EITC and where to get free tax preparation. Employer outreach and education about the EITC and other financial education programs.

EITC Coalition Partners Delegate David J. Toscano Area County Governments Charlottesville Regional Chamber of Commerce Madison House, CASH program Monticello Area Community Action Agency Piedmont Housing Alliance United Way-Thomas Jefferson Area University of Virginia UVA Community Credit Union Variety of other business and non-profit entities

What is the Earned Income Tax Credit? The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low to moderate income working individuals and families Reduces amount eligible taxpayers may need to pay in taxes, or could result in a refund of the taxes withheld from their earnings The EITC allows working taxpayers to keep more of what they earn

What is the Earned Income Tax Credit? EITC income thresholds for tax year 2010 ranges From $13,460 (if single with no children) Through $48,362 (married filing jointly with three or more qualifying children) Families can claim up to $5,666

Why it matters? The EITC is one of the federal government’s largest and most effective anti-poverty programs Helps reduce the federal tax burden on low to moderate income workers Lifts families out of poverty Supplements wages Builds long-term assets

Why it matters? Tax refunds are generally spent by the recipients in their community – creating an economic stimulus

New for Tax Year 2010 Continuation of the American Recovery and Reinvestment Act (ARRA) has significantly increased the number of households eligible for EITC benefits Expect higher number of taxpayers to qualify for EITC due to expanded eligibility requirements and economic situation During this recession more taxpayers may become eligible for EITC benefits due to reduced salaries, layoffs, furloughs, etc. – whom may not have claimed previously. Also if family situation changes (married, children) it may change their eligibility for this tax credit.

What we do Free tax preparation for eligible taxpayers through the IRS Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) Programs Education and outreach to share information about how to claim the earned income tax credit and how to access other resources available in our community

Free tax preparation in our community 1. Volunteer Income Tax Assistance (VITA) Sites perform tax preparation for individuals/households earning $49,000 or less in 2010 Basic returns only (non-itemized tax returns) AARP Tax Aide Sites (TCE Program) perform tax preparation for individuals/households regardless of income or age Itemized tax returns, some restrictions apply List of locations provided in Employer Toolkit

Coalition goals for 2011 (TY2010) Increase number of VITA sites from 8 to 11 (in addition to the 4 AARP Tax Aide sites) expand into Nelson County & increase coverage in City of Charlottesville/Albemarle Increase taxpayer awareness Focus on geographic areas with new/newer VITA sites in Greene, Fluvanna, Louisa, and Nelson counties Received grant from the National Credit Union Foundation to increase awareness in rural counties. UVA Community Credit Union was one of only 11 credit unions in the nation to receive an innovation grant from this non-profit Foundation.

Virginia EITC & Credit for Low Income Individuals An income tax credit for individuals whose family Virginia adjusted gross income is: Equal to or less than the amounts established under the federal poverty guidelines or who claimed the earned income tax credit on their federal income tax return Detailed information provided in EITC Employer Manual (page 2)

Coalition goals for TY2010 Prevent taxpayers from seeking costly Refund Anticipation Loans Returns filled electronically can receive refunds in 7 to 10 days or less! Help create an economic stimulus in the Greater Charlottesville Region by helping local taxpayers claim $1.5+ million in federal tax refunds About Refund Anticipation Loans: Short-term loan secured by a taxpayer’s expected tax refund -- designed to offer quicker access to funds than waiting for their tax refund Comes with charges over and above the regular return preparation and filing fees -- interest on the loan can result in extremely high annual rates of interest (as high as 500% or more!)

Thank you We appreciate your support. Questions? Please Contact: Pamela Frank EITC Coalition Coordinator (434) 972-1715