Comments on: Are YOU Eligible for the Earned Income Tax Credit?

By: Dennis Fischman

Dennis Fischman — Mon, 09 Feb 2009 18:26:51 +0000

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

By: Barry Rafkind

Barry Rafkind — Sat, 31 Jan 2009 15:53:01 +0000

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.

By: JD Moore

JD Moore — Sat, 31 Jan 2009 15:22:56 +0000

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.

By: Dennis Fischman

Dennis Fischman — Tue, 27 Jan 2009 18:11:57 +0000

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!

By: Barry Rafkind

Barry Rafkind — Tue, 27 Jan 2009 16:12:22 +0000

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?