Why promote the EIC and other Tax credits for low-income families?
- The EIC is the most effective anti-poverty program for families with children.
- The federal and state EIC are pro-family and pro-work. These credits reward people who find and keep a job by adding to the wages they earn. The combined federal and state EIC can provide over $8,000, depending on income and number of children.
- Federal and State EIC refunds infuse substantial amounts into the local economy. Most recipients use their EIC refunds to pay bills or buy locally. EIC dollars spent locally are an important source of economic development, particularly in lower-income areas.
What are the goals of a tax credit outreach campaign?
Increase use of tax credits among eligible families
- Many who are eligible for these tax credits aren’t getting them – either because they haven’t heard of them, don’t know they are eligible, or don’t know how to apply. Recent research from the Urban Institute shows that, nationwide, about two-thirds of families have heard of the EIC. Knowledge and use of the EIC are lower among low-income Hispanics, very poor parents, and current welfare and Food Stamp participants.
Encourage families to file back claims for tax credits for past years
- The EIC can be claimed for up to three years, and the Homestead Credit can be claimed for up to five years. Families who missed out in the past can collect substantial amounts by filing retroactively.
- Filing back claims for the Homestead Credit
Encourage families to seek free tax assitance
- Many people who know about these tax credits need help in claiming them. Free tax assistance for low income filers is available in many counties, but is not widely used. Outreach efforts to promote use of tax credits will be most effective if combined with information about locating and using free tax assistance.
- One option is the Volunteer Income Tax Assistance Program, or VITA. VITA sites are staffed by IRS-trained volunteers who can help fill out tax forms and answer questions.
- Taxpayer Counseling for the Elderly (TCE) provides free tax assistance for the elderly, as well as for persons eligible for the Earned Income Credit or the Homestead Credit.
- Follow this link for hours and locations for VITA sites or hours and locations for TCE sites. For more information on VITA sites, call the IRS Taxpayer Education Office at (414) 297-3376. Information on TCE sites is also available by phone from the AARP at 1-888-227-7669.
This website is an educational resource only. For specific tax questions, seek professional tax assistance or contact the IRS hotline at 1-800-tax-1040.
Last modified on 1/11/2019