2013 Regional Tax Summit

1. 2013 Regional Tax Summit Outreach effort of South Hampton Roads EITC Coalition

2. Regional Tax Summit 2013 • Collaborations with: • IRS • South Hampton Roads Earned Income Tax Coalition • AARP Tax Aide • United Way • Community Leaders like You

3. Welcome • Chris Neighbor – IRS SPEC • Sharon McDonald – Norfolk Commissioner of Revenue • Sharon Gares – AARP • Teresa Walker – Virginia Saves • Mark Campbell – IRS Tax Advocate

4. History of Earned Income Tax Credit • History of EITC Credit and its necessity in helping people in poverty • Established in 1975 to offset Social Security Tax burden and to provide incentive to work • Refundable Credit available to low and moderate wage workers • Credit available even if no other filing is required • Example: A low income family may not have sufficient income to be required to file, but if they do not file they do not gain access to the credit.

5. History of Earned Income Tax Credit • History of EITC Credit and its necessity in helping people in poverty • Nation’s largest anti-poverty program for working families • 27 Million Households 2011 (2010 Tax Year) Source: eitcstats • $60 Billion 2011 (2010 Tax Year) Source: eitcstats • Study by Dowd and Horowitz 2011 found ½ of all taxpayers with children received the EITC at some point. This credit has a broad reach.

6. EITC in Virginia • Virginia • Impacts 590,000 Households • Refunds $1.25 Billion • Earned Income Tax Credit NOT refundable to taxpayer for Virginia State Tax • The Virginia Office on Volunteerism and Community Service estimates the value of volunteer time to be $24.29 per hour. VITA volunteers throughout Virginia contributed over 50,000 hours to the program. ($1 million value).

7. EITC in Virginia • New in 2013: • Refunds in the Commonwealth of Virginia will not be issued via check. All refunds must be automatically deposited to an account. • For taxpayers who do not provide an account, a prepaid card will be issued. • Virginia offers free fillable forms with no income or age qualifications. • Low Income families can use efile options available at Virginia Department of Taxation website.

8. EITC in Virginia • Each City Commissioner of the Revenue Office offers State Tax Preparation services • Some Commissioners offer federal tax preparation services as well • State Tax Website: www.tax.virginia.gov

9. South Hampton Roads Data • Data analysis provided based on data provided by IRS for the tax year 2010. • Databook available at www.shreitc.com

10. EITC South Hampton Roads • CHESAPEAKE: there is potential for the EITC to bring $48.5 million into the local economy. In tax year 2010 nearly $39 million was refunded as a result of this credit. • NORFOLK and PORTSMOUTH: more than 70% of total refunds are to low income potentially EITC eligible tax payers • FRANKLIN AND ISLE OF WIGHT: more than 30% of all returns were EITC eligible and 68% of all refund dollars were attributable to the EITC. • SUFFOLK: 37% of all returns prepared claimed the EITC while 58% of all returns were attributable to low income households. • VIRGINIA BEACH: the most populous city in the area, has the greatest number of EITC eligible households at 35,461 receiving more than $74 million in refunds in 2010.

11. EITC Beneficiaries • More than 66% of all households in South Hampton Roads in 2010 were eligible for the Volunteer Income Tax Assistance (VITA) program. • A large number of these households would also be EITC eligible. • Key Beneficiaries of EITC • Disabled workers • Young Families • Displaced workers • Military • Industries • Service • Retail • Hospitality • Call Centers • Construction • Administration

12. South Hampton Roads Data

13. South Hampton Roads Data

14. South Hampton Roads Data

15. South Hampton Roads Data

16. South Hampton Roads Data

17. South Hampton Roads Data

18. Impact On Local Economy • What does EITC mean for the local economy? • EITC refundable credit enables low wage workers to remain self-sustaining. • Credit often used to catch up on outstanding bills, bring current rents and to save for repairs and other major expenses. • Savings on tax preparation and avoidance of tax loan products provides more funding for necessary household expenses. • Refunds are recycled into the local economy

19. Unclaimed Credits

20. Unclaimed EITC • Virginia Department of Social Service Estimates: • $ 21,969,740 unclaimedEITC for DSS clients in South Hampton Roads • 12,921 Households • More than 70% of these households did not file a tax return • IRS Estimates: • 20 – 25% of families eligible for EITC do not receive the credit • At 20% - Missed potential for local families - $57,838,826 • At 25% - Missed potential for local families - $77,118,435 To get a full copy of the analysis or this presentation visit: www.shreitc.com

21. Mock Tax Return

22. Qualifying for EITC To qualify for Earned Income Tax Credit or EITC, you and your spouse if married and filing a joint return, must meet all of the following rules: Have a valid Social Security Number Have earned income from employment, self-employment or another source Cannot use the married, filing separate filing status Must be a U.S. citizen or resident alien all year or a nonresident alien married to a U.S. citizen or resident alien and choose to file a joint return and be treated as a resident alien Cannot be the qualifying child of another person* Cannot file Form 2555 or 2555-EZ (related to foreign earned income) Your Adjusted Gross Income and earned income must meet the limits shown on the Income Limits, Maximum Credit Amounts and Tax Law Updates Page Your investment income must meet or be less than the amount listed on the Income Limits, Maximum Credit Amounts and Tax Law Updates Page

23. Qualifiers for Earned Income Tax Credit • EITC Income Limits- 2012 • $45,060 ($50,270 married filing jointly) with three or more qualifying children • $41,952 ($47,162 married filing jointly) with two qualifying children • $36,920 ($42,130 married filing jointly) with one qualifying child • $13,980 ($19,190 married filing jointly) with no qualifying children • Investment income must be $3,200 or less for the year. .

24. EITC Maximums 2012 $5,891 with three or more qualifying children $5,236 with two qualifying children $3,169 with one qualifying child $475 with no qualifying children

25. Qualifiers for Earned Income Tax Credit • EITC Qualifiers – how do people become eligible for EITC • Income Qualifier • Family Size • Wages • Tool: EITC Assistant

26. Other Credits Available • Other Credits supporting the same Demographic • First Time Homebuyer Credit • Adoption Credit • Child and Dependent Care Credit • Lifetime Learning Credit

27. IRS Resources • IRS Resources available to assist families • Stakeholder Partnerships, Education and Communication (SPEC) • IRS Office Services • Tax Advocate Service

28. Community Solutions to Assist Families • VITA –SHREITC • Website: www.shreitc.com • Tax Preparation Locations • Phone 1-888-664-6116 • Community Support

29. Community Solutions to Assist Families • AARP Foundation Tax-Aide: Available to taxpayers with low-and moderate-income ‘Special attention’ to those age 60 and over • Prepared over 10,000 Federal and over 10,000 Virginia returns • Central Library Virginia Beach is 2nd largest Tax-Aide site in USA • 4,932 Federal, 4,812 State • Tidewatertaxaide.com

30. Community Solutions to Assist Families • Chesapeake, VirginiaCuffee Library Operating Hours: Thurs, Fri, Sat, 10 AM to 2 PM Great Bridge Presbyterian Church Operating Hours: Tue & Wed, 9 AM to 2 PM Russell Memorial LibraryOperating Hours: Mon, Tue, Wed & Fri, 9 AM to 3 PM • Norfolk, Virginia • Norfolk Fitness and Wellness Center Operating Hours: Mon, Tue, Thurs, Fri 10 AM to 3 PM • Wed 10 AM - 6 PM BY PRIOR ARRANGEMENT • Sat 10 AM - 2 PM

31. Community Solutions to Assist Families • Portsmouth, Virginia • Churchland Library Operating Hours: Mon, Wed, & Thu, 10 AM to 2 PM • Suffolk, Virginia • Workforce Development Center Operating Hours: Tue, Wed, Thurs. 12:30 PM to 3:30 PM • Virginia Beach, Virginia • Princess Anne Library • Operating Hours: Mon & Wed, 10 AM to 2 PM, Thurs, 3 PM - 6 PM • Virginia Beach Central Library Operating Hours: Mon, Wed - 10 AM to 6 PM; Tue, Thurs - 10 AM to 8 PM; Fri, Sat - 10 AM to 4 PM

32. Community Solutions to Assist Families • My Free Taxes – United Way • Online self preparation • Volunteers Assist by phone • Income limit $57,000 Household AGI • Made possible by Walmart Grant

33. Community Solutions to Assist Families • Facilitated Self Assistance– • Virginia Beach Human Services • NSU • ODU • Special Events • EITC Day • January 25th, Norfolk Workforce Development Center • Super Saturday Tax Preparation • February 23rd, 2013 Youth Employment Center Pembroke Mall

34. Online Resources • IRS Website Resources www.irs.gov • Fillable forms • FreeFile Alliance Software • Locations of VITA Sites nationwide • Education Resources • Virginia State Tax Website www.tax.virginia.gov • FreeFile Federal and State • SHREITC Website www.shreitc.com

35. Barriers to Obtaining Maximum Refunds • 1099’s • Impact of Settled Debt • Impact of Retirement Distributions • Separated Parents both claiming children • Young Adults claimed by parents • Documentation of Expenses • What is needed at VITA Site • Have a handout

36. Beyond Tax Preparation • Programs partnering with tax sites to expand financial empowerment efforts • Virginia Saves • Virginia Beach Financial Empowerment • United Way Financial Stability • 70+ Agencies supported • Virginia Individual Development Accounts (VIDA) • FDIC Website

37. Ways to Be Involved • Involvement in Coalition • Ongoing support necessary to extend outreach • Promotion • Increase Community Awareness • Invitations to meetings where we can speak • Volunteering • Online training • Greeters • Contact Sheets • Referrals • Roving Site • FAS Sites • Appointment Sites

38. Questions and Answers