2009 Earned Income Tax Credit Benefits Working Families With up to Nearly $5,000 in Individual Tax Refunds

Los Angeles EITC Partnership Supports Families with Refund Filing, Free Tax Preparation, and Financial Counseling throughout Los Angeles County

The Greater Los Angeles Earned Income Tax Credit (EITC) Campaign Partnership, led by United Way of Greater Los Angeles, today announced its annual effort to help qualified low and moderate-income families reach financial stability during a press conference held at Magnolia Place Family Center. In attendance at the conference were Mayor Antonio Villaraigosa, Los Angeles County Board Supervisor Mark Ridley-Thomas, State Controller John Chiang, United Way of Greater Los Angeles’ Vice President of Community Investment Alicia Lara and past EITC recipients. The EITC partnership is part of a widespread national effort to drive public awareness about the tax credit and other services provided by participating organizations.

EITC has become one of the largest anti-poverty programs for working families, bringing an estimated $1.5 billion in refunds to qualified taxpayers and helping to drive the local economy in Los Angeles County. For 2009 (the 2008 tax year), the credit can translate to a refund of up to $4,824 for low and moderate-income families with two or more children – a figure equal to nearly two months of income for many families.

EITC provides the following benefits for qualified working families:

• Families with two or more qualifying children who earn less than $38,646 (or $41,646 if married filing jointly) are eligible for up to $4,824;

• Families with one qualifying child who earn less than $33,995 (or $36,995 if married filing jointly) are eligible for up to $2,917; and

• Workers between the ages of 25-64 who earn less than $12,880 (or $15,880 if married filing jointly) and have no qualifying children are eligible for up to $438

“More than ever, we need to help our working local families gain a foothold and reach financial stability. As one of the largest financial resources for low and moderate income families, EITC helps us get closer to that goal,” said Elise Buik, president and CEO of United Way of Greater Los Angeles. “With costs associated with housing, food, healthcare and childcare continuing to increase, it is important that we educate the public about this vastly underutilized credit, and assist families in claiming the over $250 million in EITC credits that was left on the table just last year.”

Qualifying families with two or more children — including those in nontraditional situations — may be eligible for refunds. Those who qualify, but have failed to claim the credit in prior years, may apply for the EITC retroactively for a period of up to three years. Additionally, the IRS will offer a Split Refund Option, giving taxpayers the option of having refunds directly deposited in up to three financial accounts, such as checking, savings, and a retirement account, helping them build assets and financial security.

In addition to the refund available through EITC, the Child Tax Credit also provides families earning over $8,500 with dependent children under 17 years old, the opportunity to receive credits of up to $1,000 per child. Volunteer Income Tax Assistance (VITA) sites, supported by the EITC partnership, can help families apply for these credits. Last year, the partnership supported and promoted VITA and AARP Tax-Aide sites that helped residents collect approximately $11 million in EITC (a 59% increase from the previous year) and $25 million in total tax refunds (a 35% increase from the previous year).

To qualify for EITC services and tax credits, claimants must be qualified working U.S. citizens and legal residents with Social Security numbers. If a legal resident meets all of the qualifications, they are also able to retroactively claim the EITC for a period of up to three years.

“With about 20 percent of eligible Californian’s missing out on this valuable credit, it is our job to educate people about this benefit and help them claim money that is rightfully theirs,” said Mark Ridley-Thomas, Supervisor Los Angeles County. “We need to support our residents’ futures and, in term, bolster the financial stability of Los Angeles County as a whole.”

For more information and to see if they qualify, individuals and working families can call L.A. County’s “2-1-1″ line or visit the EITC Partnership’s web site at www.eitc-la.com to find one of over 100 free tax preparation sites.

Source: United Way of Greater Los Angeles