Regional Earned Income Tax Credit Initiative (EITC) Presentation to Agency Providers January, 9, 2015

2 Regional EITC – What Is It? Earned Income Tax Credit (EITC)is a fully- refundable tax credit based on income, filing status and family size. Enacted by Congress in 1975 to reward work and off set social security taxes. Could reduce the amount of federal tax owed, reduce tax owed to zero, or even produce a refund beyond the amount of tax withheld.

3 Regional EITC – Why? Unclaimed Money : It is estimated that 20% of eligible EITC individuals/families do not claim the credit. It is estimated that each year, 30% of EITC claims are new claims. The average EITC claim nationally is over $2,355.

4 Regional EITC – Why? Save Money-Avoid Unnecessary Costs ! RALs are loans secured by a taxpayer’s anticipated tax refund. RACs are temporary bank accounts established on behalf of a taxpayer into which a direct deposit refund can be received and out of which a bank typically issues a payment to the taxpayer. With both RALs and RACs, tax preparation and product fees are subtracted directly from the refund, and the taxpayer does not make any “out-of-pocket” payments. They are frequently marketed to taxpayers who do not have cash to pay for professional tax preparation services.

5 Regional EITC – Who Is Eligible? Must have “earned” income and you must file a tax return. Must meet certain rules and must file a return (even if the claimant does not owe any tax or did not earn enough money to require filing a return).

6 Regional EITC – Who Is Eligible? Earned Income and Adjusted Gross Income (AGI) must be below: $46,997 ($52,427 married filing jointly) with three or more qualifying children $43,756 ($49,186 married filing jointly) with two qualifying children $38,511 ($43,941 married filing jointly) with one qualifying child $14,590 ($20,020 married filing jointly) with no qualifying children Investment income must be $3,300 or less for the year.

7 Regional EITC – Maximum Refundable Credits: $6,143 with three or more qualifying children $5,460 with two qualifying children $3,305 with one qualifying child $496 with no qualifying children

8 Regional EITC – How Is It Delivered? 29 free (VITA) tax prep sites throughout our region (one-on-one): In Ohio-Butler, Hamilton and Clermont counties In Kentucky-Boone, Campbell and Kenton, Carrol, Gallatin, Grant, Owen, Pendleton counties In Indiana -Ohio and Dearborn counties Eligible for free service if income is below $53,000. Offered through trained volunteer tax preparers. (

9 Other Free Tax Preparation Options (self preparation): One line free file software available for taxpayers earning less than $58,000. ( (

10 Regional EITC – 2014 Results Total Number Returns 19,832 Total Returned $20.9 million Total Fees Saved $ 3.9 million** Number Volunteers 753 Number Sites 126 All numbers include VITA, AARP and Benefit Bank (**) based on $200 estimate for paid preparer

11 I Think My Client May Qualify- What Should I Do Next? Help spread the word to your clients/consumers (mailings, s, meetings). Call to locate the nearest Volunteer Tax site or Volunteers will prepare your tax return and file it OR you can file yourself on-line - and it’s free! Become a volunteer tax preparer yourself and help families receive this free service.

12 Regional EITC Thank You!