Earn It. Keep It. Save It.

1. Earn It. Keep It. Save It. A Campaign for Working Families

2. Types of Tax Credits • Refundable Credits – Taxpayer receives full amount of credit they are entitled to, whether or not they have tax liability. • Non-refundable Credits – Taxpayer receives maximum amount of credit allowed or a credit equal to their tax liability whichever is less.

3. What is the Earned Income Tax Credit? • The EITC is a federal tax credit for working individuals and families • It reduces the amount of income tax liability • It could add hundreds or thousands of dollars to the income tax refund • MD State also has an EITC.

4. How much is the EITC worth? • Refundable Credit for working taxpayers with Earned Income and Adjusted Gross Income (AGI) of less than: • $36,348 ($38,348 married filing jointly) with 2 or more qualifying children • $32,001 ($34,001 married filing jointly) with one qualifying child, or, • $12,120 ($14,120 married filing jointly) with no qualifying children • Maximum Credit (for 2006 tax year) for • 2 or more qualifying children $5,443 • 1 qualifying child $3,296 • No children $412

5. EITC Qualifications • Taxpayer must have earned income (income from work) • Investment income (interest, dividend income) must be less than $2,800 or less for the year • Taxpayer, spouse and all qualifying children must have SSN (ITIN holders do not qualify) • Taxpayer, spouse and all qualifying children must be U.S. resident or resident alien for entire year • Filing status cannot be Married Filing Separately • Taxpayer, spouse and qualifying children cannot be the qualifying child of another taxpayer

6. Telephone Excise Tax Refund • One time refund in 2006 for reimbursement of Federal excise taxes paid on phone bills between 2003 - 2006 • Refund amount based on number of household exemptions listed on tax return • Refund amount ranges from $30 to $60 • Taxpayers who are not required to file tax returns may also receive this refund – simplified form available

7. Child Tax Credit • Partially refundable, partially non-refundable. • Maximum credit is $1,000 per qualifying child for tax year 2006. • For all taxpayers with adjusted gross incomes of less than $55,000 (may be higher based on filing status) • Qualifying child must • be under the age of 17 on Dec. 31, 2006 • be a U.S. Citizen, national, or resident (ITIN eligible) • have lived with the taxpayer more than half of 2006 (183 days) • not have provided more than half of their own support • Special rules for divorced or separated parents

8. Child and Dependent Care Credit • Non-refundable credit • Most commonly used credit in U.S. • Credit is for expenses paid for care so taxpayer could work or look for work • Person being cared for must be: • the taxpayer’s dependent child (there are specific definitions for dependent) • the taxpayer’s dependent or spouse who is not physically or mentally capable of self-care

9. Free Tax Preparation Sites… • Provide free tax preparation services: • 2. Are located right in the community. • 3. Are staffed by volunteers trained by the IRS • 4. Specialize in working families’ taxes, including Earned Income Tax Credit ... • 5. Connect taxpayers to other • asset building opportunities

10. Baltimore CASH Campaign Sites • 15 sites throughout Baltimore City and Baltimore County • Eligibility: • Slightly varies from site to site, but taxpayers earning under $40,000 (within the EITC guidelines). • Two sites provide low-cost services for filers who are outside of the eligibility guidelines (Bon Secours and EHCDC) • Open the week of January 20, 2007 • Close from Mid-March to April 15th • Appointments: 410-234-8008 (open Jan 2, 2007) • Some sites allow for drop-ins. Flyer will contain details.

11. Money Power Day! • Money Power Day 2007 is a financial fitness fair: • Free tax preparation – provides free tax and low-cost preparation to clients • Credit Café – assistance in pulling free credit reports and receiving one-on-one counseling • Training and education – workshops on everything from starting a small business to identity theft • Exhibitor Hall – opportunities to meet with financial service professionals and other service providers to receive on-site assistance

12. Important Dates to Remember • January 2nd: CASH scheduling lines open 410-234-8008 • January 9th: Tax Credit Training • January 20th-27th: All CASH Campaign sites open • February 24th: MONEY POWER DAY!!! • March 4th – April 15th: CASH Sites close down • April 17th: Maryland and Federal Taxes Due • Spring 07: Financial Counseling Certification Course • Summer 07: Property Tax Credit Clinic

13. Year-Round Resources for Clients Baltimore CASH Campaign Joanna Smith-Ramani, Director Pam Chaney, Operations Director www.baltimorecashcampaign.org First Call for Help (can refer to year-round tax preparation assistance) 410-685-0525 or 211 Tax Disputes or back tax preparation Low-Income Taxpayer Clinic Maryland Volunteer Lawyers Service 410-547-6537 800-510-0050

14. Take The Money! You’ve Earned It. • This presentation is provided by the Baltimore CASH Campaign. • The Baltimore CASH Campaign pledges to: • Promote greater awareness of the EITC among low-income families, • Advance free tax preparation and the avoidance of unnecessary charges, • Incorporate the use of tax refunds as part of an overall asset-building strategy, and • Advocate for working families in the Baltimore area. Pam Chaney Baltimore CASH Campaign One North Charles Street, Suite 222 Baltimore, Maryland 21201 Phone: 410-292-0018 joanna@baltimorecashcampaign.org Joanna Smith-Ramani, Director Baltimore CASH Campaign One North Charles Street, Suite 222 Baltimore, Maryland 21201 Phone: 443-451-4079 joanna@baltimorecashcampaign.org