Erie Free Taxes

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) is a special tax benefit for working people who earn low to moderate incomes. It is a refundable federal tax credit that reduces or eliminates their income taxes. If the amount of tax credit the worker qualifies for is more than taxes he/she owes, the worker will receive the difference as a cash refund. The EITC allows working families and individuals to keep more of the money they work so hard to earn.

Services

• Free federal, state and local tax preparation at Volunteer Income Tax Assistance (VITA) sites in various city and county locations
• Additional Services: Community Outreach and education regarding the benefits of the federal Earned Income Tax Credit (EITC) program, and financial literacy and asset management education and counseling

Advantages of the EITC

• Lifts approximately 5 million Americans above the poverty line every year
• Reduces child poverty by 25%
• Is a powerful wage subsidy
• Can increase wages by up to $2/hour*
• Rewards work and stabilizes the workforce
• Generates additional economic activity and growth within the community

*Sources: Govebrookings Institution

Eligibility

Income Thresholds for 2008

Earned income and adjusted gross income (AGI) must each be less than:

• $38,646 with 2 or more qualifying children (*$41,646)
• $33,995 with 1 qualifying child (*$36,995)
• 12,880 with 0 qualifying children (*$15,880)

*married filing jointly

Tax Year 2008 Maximum Credit

• $4,824 with 2 or more qualifying children
• $2,917 with 1 qualifying child
• $438 with qualifying children

Income tax returns are filed on-line at all VITA sites. Recipients can receive their refund between 7-10 days if Direct Deposit is used.

VITA Sites

Volunteer Income Tax Assistance (VITA) sites provide free income tax filing services to eligible workers.

• Federal, state and local tax returns are completed by trained and IRS certified volunteers at VITA sites located throughout the city and county of Erie
• Income tax returns are filed electronically at all VITA sites. Recipients can receive their refund between 7-10 days if Direct Deposit is used

Call 1-888-TAX-5680 for a list of sites and schedules.

Volunteer Opportunities

• Volunteers prepare basic and intermediate-level tax returns
• Volunteers do not need a background in finance, business, or accounting
• This is a wonderful opportunity to help people in a way that improves quality of life for individuals, families, and the community

Through the awareness, education, and the use of free tax preparation sites we will succeed in bringing the benefits of the EITC to our community.

If you are interested in learning more about the VITA volunteer experience, please contact:

Cheryl Bates, Program Director
Erie FREE Taxes
814-454-0843
cbates@eriecommunityfoundation.org

Statistics

• For TY 2006, nearly 21,500 eligible Erie city and county taxpayers received approximately $40 million in earned income tax credit refunds
• 15-25%* of taxpayers eligible for the EITC do not claim it-as much as $13 million in EITC refunds may have gone unclaimed in Erie County for TY 2006
• 70%* of EITC recipients pay to have their taxes filed-as many as 15,000 Erie County EITC recipients may have paid as much as $1.9 million to have their taxes filed, or 5% of the total EITC refund amount in Erie County
• Through host tax preparation sites called Volunteer Income Tax Assistance (VITA) sites, eligible tax payers have their income tax returns completed and electronically filed for free, saving each filer hundreds of dollars in commercial tax return preparation and refund loan fees

*Sources: Government Accounting Office; Brookings Institution