1. Benefits of the Earned Income Tax Credit (EITC) A Gateway to Self-Sufficiency Region IV, Southeast Quality of Life Conference July 12-14, 2011

2.  A federal tax benefit to help low- and moderate- income families and individuals increase their financial stability.  Reduces taxes for workers  Supplements wages  Makes work more attractive than welfare  Fully refundable credit What Is The Earned Income Tax Credit (EITC)?

3. Why Is The EITC So Important?  EITC remains the single largest federal aid program for working families.  EITC provides more $$ to working families than all other federal programs combined.  EITC is the most effective method to pull a low-income family out of poverty (in 2010, this was 5 million + households, including 2.6 + million children).

4. Volunteer Income Tax Sites Helping Working Families Out of Poverty, 2010 Full-time Minimum Wage Job* (less withholding) $11,451 Full-time Minimum Wage Job* (less withholding) $11,451 Food Stamps $1,884 Food Stamps $1,884 EITC $2,300 Without EITCWith EITC Annual Income Estimated Poverty Line for Family of Two (including one child) $14,698 111% 91% Did You Know…?

5. EITC Impact in Georgia For Tax Year 2010:  975,000 + households in Georgia received the EITC  $2.3 billion + - total EITC received by Georgia taxpayers  $2,300 + – average amount of EITC per return

6. Why is Outreach Needed? 6 75 – 80% Claim EITC 20 - 25% Do Not Claim EITC EITC Eligible Workers

7.  The IRS estimates that 20-25% of qualifying workers miss out on the EITC.  In Georgia, this equates to 250,000 – 300,000 families that are not receiving the EITC.  Families and individuals that are receiving the EITC: 30% are using free filing programs or self-preparation 70% are using high-cost commercial tax preparation services  Those households that use commercial preparers are spending hundreds of dollars in tax prep fees and e-filing charges. Why is Outreach Needed?

8. EITC Increases Number of children: Income less than (married): EITC up to: 3 or more children$43,352 ($48,362)$5,666 2 children $40,363 ($45,373) $5,036 1 child $35,535 ($40,545) $3,050 No children $13,460 ($18,470 $457  Investment income cannot exceed $3,120. For Tax Filing Year 2011:

9. Who Qualifies for the EITC?  Families and individuals who: Have a social security number (every household member) Work full-time, part-time or self-employed Meet income guidelines  Eligible children must be a “qualifying child” (age, residency, and relationship tests) Some very low-income workers without a “qualifying child” may be able to claim the EITC

10. How Do You Claim the EITC?  You must file a federal tax return: If you have children:  Form 1040 or Form 1040A – not 1040EZ  EIC – Schedule EIC If you do not have children:  Form 1040, 1040A, or 1040EZ  EIC – Schedule EIC  Eligible workers can claim EITC refunds for up to 3 previous years.  Remember: To be EITC-eligible, must have a SSN, earned income, and meet income guidelines. Children must meet qualifying tests.

11. What Is Being Done In Georgia?

12. Volunteer Income Tax Assistance (VITA)  VITA is an alternative to high-cost commercial tax preparation services.  VITA provides FREE tax preparation services to households that earn less than $49,000  Volunteer-driven program. Volunteers are IRS-certified.  Objectives of VITA: Promote tax understanding/awareness Prepare accurate returns free for qualified taxpayers Encourage personal asset-building through tax incentives

13. Volunteer Income Tax Assistance (VITA)  IRS partners with local Coalitions and organizations to provide this service.  Site locations – libraries, malls, community centers, schools/colleges, social service organizations. Locations where the target population feels safe.  VITA services complement the services offered by the host site. These services can include: Educational and counseling programs Small business start-up and financial assistance Homeownership programs and financial assistance Job skills training Benefit screening (SNAP/food stamps, TANF, WIC, LIHEAP, etc.)

14. What’s Going On In Georgia  300 VITA/TCE sites in Georgia  76 Counties have VITA/TCE sites  1,400 volunteers  120 site coordinators  VITA program activity (2011): Returns E-Filed: 67,100 Total EITC Dollars:$17,223,100 Total Refund Amt:$72,392,800

15. EITC Coalitions in Georgia  Savannah Coastal Empire Asset Development Coalition Bryan, Chatham, & Effingham Counties. 1816 Abercorn St (912)-447-5577 Contact: Teinique Gadson, Director, Neighborhood Improvement Association. Relationship Manager: Ken Brown  Southeast-Coastal Georgia EITC Coalition (Brunswick) Glynn, Camden, McIntosh Counties Relationship Manager: Latisa Steele  Atlanta Prosperity Campaign (Atlanta)  Chattahoochee Valley VITA Coalition (Columbus)  Greater Athens Economic Development Coalition (Athens)  Macon EITC Coalition (Macon)  The Children’s Initiative (Waycross)  South Central Georgia Asset-Building Coalition (Valdosta)

16. How Can HUD Agencies in Georgia Get Involved With VITA and EITC?

17. How You Can Get Involved  Conduct an open dialog (all year long) with your clients: Demonstrate how the EITC, SNAP/food stamps, and other economic supports can help their family Encourage clients to use the free tax preparation services at local VITA sites, if available Discuss alternatives to high-cost refund anticipation loans (RALs) Educate clients on the out-of pocket costs associated with commercial tax preparers  Open a VITA site in your local HUD offices  Get involved with your local EITC Coalition (if one doesn’t exist, help create one)

18. For More Information On VITA & EITC Assigned Atlanta & Rome Yolanda Weaver / Kimberly Lovett Assigned Augusta & Athens Remonia Brown / Marian Lee Assigned Macon, Valdosta & AARP Lucy Atkins / Ariana Sanders Assigned Columbus & Albany Joanne Butler / Yvonne Davis Assigned Savannah-Brunswick-Statesboro Kenneth Brown / Latisa Steele

19. Thank You! Kenneth Brown (Savannah Area) Senior Stakeholder Relationship Tax Consultant W&I Wage & Investment Division 912-651-1422 kenneth.brown@irs.gov www.irs.gov Latisa Steele (Brunswick Area) Senior Stakeholder Relationship Tax Consultant Latisa.steele@irs.gog 912-651-1163