Regional Earned Income Tax Credit Initiative (EITC)

1. 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. (www.makeworkpay.com)

9. Other Free Tax Preparation Options (self preparation): One line free file software available for taxpayers earning less than $58,000. • (www.myfreetaxes.com) • (www.irs.gov/freefile)

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, emails, meetings). • Call 2-1-1 to locate the nearest Volunteer Tax site or www.makeworkpay.com. • 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!