by Dennis Fischman in Consumer Money Saving, Economy & Poverty
Posted on January 27, 2009 at 9:51 am
Last Modified on January 27, 2009 at 10:51 am
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The Earned Income Tax Credit (EITC) can put up to $5,548 in your pocket this tax season! EITC is the federal and state income tax credit available to low and moderate-income working families and individuals. Don’t miss out! Last year, more than 50,000 eligible working families in Massachusetts failed to apply for EITC, leaving an estimated $75 million in unclaimed money in Washington, D.C. Couldn’t you use that money where you live?
The Commonwealth of Massachusetts, the Internal Revenue Service (IRS), and anti-poverty agencies like CAAS, the Community Action Agency of Somerville, are teaming up to spread word regarding the EITC. You can find FREE tax filing assistance to help you access those credits.
CAAS encourages you to make an appointment with National Student Partnerships (NSP) to file for your EITC and Child Tax Credit. NSP is an organization dedicated to combating poverty in our nation’s communities by engaging college students in this effort. To sign up for free tax preparation from NSP, call the Somerville office at (617) 591-9400, or the Cambridge office at (617) 349-6342.
Volunteers will prepare federal and state income tax returns and provide free, confidential tax preparation services at The Family Center, located at 366 Somerville Avenue in Somerville, and at the Cambridge Multi-Service Center, located at 19 Brookline Street in Cambridge. Tax services will be provided from January 26 through April 15 by appointment only. NSP volunteers will file your tax returns electronically, shortening your wait to receive refunds.
If you are a working family—single or married—with two or more children, and your family earned less than $41,646 in 2008, you may be eligible for up to $5,548 in federal and state credits. A family with one child, earning less than $36,995, is eligible for up to $3,355. A single person or married couple without children who earned less than $15,880 is eligible for $504. Use the FREE EITC tax preparation sites, get your refund in seven to ten days, and keep your money! You earned it!
The mission of CAAS is to reduce poverty among local families and individuals while working to counteract, and whenever possible eliminate, the societal conditions that cause and perpetuate poverty. For more information about CAAS, see www.caasomerville.org.
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Dennis, thanks for spreading the word about this opportunity! In Somerville, I wonder how many eligible families there were last year, how many of them used the EITC, and how many families are eligible this year? Do you know?
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I will try to find out. What I can tell you right now is that NSP-Somerville alone served 178 households who received a total of $224,375 in EITC and other tax savings. That’s an average of $1,260 per household. Not too shabby!
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This EIC is mainly for families, not individuals. As an individual with no children, I have to be REALLY bad off (income less than $12,500 a year) to qualify for this credit. I wonder how individuals making twice as much as that can afford the rent around here. Same for most so-called “low income” programs. HUD uses the figure of $42,000 a year or less for “low-income.” Yes, an individual making $40,000 a year can live in the projects! Thanks, to Bill Clinton, an individual can even apply to live in one (ruling came in 1995). Before that time, ONLY families could live in one. I understand the housing authorities can still restrict individuals, anyway. By the same token, HUD recognizes an income of about $29,000 a year or less as “very low income.” That gets one the privilege of getting higher on the waiting list, but not the top. One’s got to be homeless for that. However, $29,000 a year is still WAY too high for nearly EVERY government program for the poor (fuel assistance, “food stamp,” Medicaid, etc.). It is barely within the limit for the state subsidy for health insurance.
Now, one may ask, why is this so? Because the feds use ANOTHER standard, the so-called “poverty level.” This comes from the Department of Labor, Bureau of Labor Statistics, I believe. And, whereas HUD adjusts for the cost of living in a geographic area, BLS has just ONE national standard. I’ll tell you, $10,800 a year (the 2009 federal “poverty level”) goes a LOT farther in Pine Bluff, Arkansas than in Somerville, Massachusetts. The limit for most of the assistance programs is 1 1/4 or 125% of that level, to wit, about $13,000 a year for an individual. Now, again, it begs the question, how does one pay the rent on that income? Not when it is rare to see an apartment go for less than $1,000 a month, and it’s still a lot of money if one doubles up as has been the custom in this area for nearly two generations now.
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JD asks a good question about how families or individuals meeting the EITC limits could afford to live in Somerville. Are they primarily in the projects? The standardized income levels just aren’t reflective of regional costs of living.
By the way, JD, the limit for individuals with no children is $12,880 not $12,500 according to the MA EIC info page.
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I posed Barry’s question in Comment #1 above to a local IRS officer. Here’s what he wrote:
Dennis,
I do have this information and I can give you some rough numbers for Somerville, tax year 2007:
• Over 3500 tax returns were allowed EITC
• Resulting in approximately $5 million dollars of EITC money
Nationally, estimates are that 20-25% of EITC eligible individuals and families do not claim the money, ergo, in Somerville that would equal approximately 780 tax returns and $1,075,000 in EITC.
Thank you,
Daniel Caruso
IRS – SPEC – Boston
(617) 316-2429
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