1. Earned Income Tax Credit (E.I.T.C.) Presenters: Wayne Tormala, City of Phoenix Nichole Ayoola, City of Mesa Steve Wise, Tempe Community Council

2. Earned Income Tax Credit Largest Federal Tax Benefit Program 32 Billion Dollars in Tax Refunds Lifted nearly 5 Million out of Poverty!! Work Incentive vs. Public Assistance

3. Who Can Receive E.I.T.C.? Eligibility for the credit and the size of the credit is determined by a family’s income and number of dependents. For 2003, the maximum family income will be $34,692 and the maximum credit @ $4,204 Undocumented workers are not eligible for E.I.T.C. but can receive Child Tax Credits- ITIN Single persons with very low incomes also qualify for a small E.I.T.C.

4. E.I.T.C. CHALLENGES Lack of awareness of the program Transaction costs Predatory Practices….  Check-Cashing Operations  Rapid-Refund Loans  High Commercial Fees

5. Impact of E.I.T.C. in Phoenix 3 5,000 Workers are NOT Receiving the Financial Boost $ 25-64 Million of Unclaimed E.I.T.C. PHOENIX IS MISSING THIS ECONOMIC BOOST!!

6. Impact of E.I.T.C. in Mesa O ver a half million dollars in total refunds (EITC & other refunds) returned to residents 5 48 families assisted (filings for ’02) 2 34 families received E.I.T.C. (filings for ’01)

7. Impact of E.I.T.C. in Tempe/Guadalupe 4 43 returns filed O ver $340,000 returned in E.I.T.C. –average of $1,056

8. How People Use Their EITC… Pay Bills Make Significant Purchases Homes Auto Education & Training

9. Research included Best Practices in Cities Nationwide…. Kansas City C hicago San Antonio H ouston D es Moines Denver Baltimore Oklahoma City Indianapolis Miami Louisville Tulsa

10. Proposed Phoenix E.I.T.C. Campaign Public Awareness Targeted Communities Asset Building Education

11. Media Alerts Schools Utility Companies Employers Churches Public Forums Public Awareness

12. Website News Radio Television Fliers in the community Direct mail letters Marketing Ideas Used in Mesa

13. Financial Literacy Training Individual Development Accounts Asset Building Education

14. Low Income < $30,000 12,000 7,000 2,000 Targeted Communities Maryvale South Phoenix

15. 85035 85031 85033 85037 Zip Code Total Sum EIC TY2002 as of 4/15/2003 10% Census Low Income $(avg EITC) of non-EITC filers 25% Census Low Income $ of non- EITC filers % of Total Spanish Speak Only Tax Prep Fees and/or RALs (Paid Preparers) @ $150 avg. Sum of EITC TY2001 85035$10,303,800$1,080,532$2,701,33016.0%727,200$9,326,009 85031$6,677,654$581,884$1,454,71011.8%457,200$5,851,476 85033$11,629,586$1,180,415$2,951,0398.9%822,600$10,332,639 85037$5,635,923$441,027$1,102,5674.5%412,950$4,831,462 $34,246,963$3,283,858$8,209,645 $2,419,950$30,341,586

16. Low Income < $30,000 12,000 7,000 2,000 85009 85041 85040 85007 Zip Code Total Sum EIC TY2002 as of 4/15/2003 10% Census Low Income $(avg EITC) of non-EITC filers 25% Census Low Income $ of non-EITC filers % of Total Spanis h Speak Only Tax Prep Fees and/or RALs (Paid Preparers) @ $150 avg. Sum of EITC TY2001 85007$2,537,137$495,566$1,238,91414.2%188,550$2,406,978 85040$9,696,377$3,061,004$7,652,50913.0%511,050$6,682,583 85041$8,610,574$671,321$1,678,30212.4%601,050$7,690,058 85009$11,304,268$1,344,573$3,361,43219.3%759,600$10,249,763 $32,148,356$5,572,463$13,931,157 $2,060,250$27,029,382

17. 2. Increase Utilization 3. Reduce Transaction Costs 1. Increase Public Awareness GOALS….

18. ADDITIONAL E.I.T.C. CHALLENGES Volunteer Management Community Education Technology Bringing in the Business Community

19. E.I.T.C. in Mesa – looking forward I ncrease access to E.I.T.C. 4 8 active E.I.T.C. volunteer income tax preparers A dvocacy C oalition-building O utreach C apacity-building

20. E.I.T.C. Experience in Tempe Responsibilities IRS handles the taxes & tax training City handles the community coordination & any specialized volunteer training Two parts Public relations Completing returns

21. BIG issue -TECHNOLOGY MOBILIZE your resources early! Don’t underestimate volunteer response THINK REGIONAL when picking tax prep sites Tie in with other VITA sites - you will need them Remember -results are tangible (including tax refunds & other tax credits) Tempe’s Tips

22. Local & State Govt. Businesses Employer s WORKIN G POOR Banks E.I.T.C. Who Benefits?

23. E.I.T.C. Available Local Resources + Implemention = IMMEDIATE effect on local community

24. Earned Income Tax Credit (E.I.T.C.) The following individuals are available to visit your municipality/organization and provide further information on establishing an E.I.T.C. program in your area. Wayne Tormala, City of Phoenix (602) 495-7044 Nichole Ayoola, City of Mesa (480) 644-5583 Steve Wise, Tempe Community Council (480) 858-2300