Are Virginians maximizing their federal tax returns? Unfortunately many of our low-to-moderate income neighbors routinely miss their chance to claim thousands of dollars a year in federal income tax refunds. Statewide, millions of federal tax return dollars go unclaimed each year because of the lack of awareness of the refundable Earned Income Tax Credit (EITC).
The message we are challenged to spread is that anyone who will earn less then $36,348 in 2006 may be eligible for the EITC. The EITC is a federal tax credit available to low and moderate income individuals and families with a household income of less than $36,348. Married couples filing a joint return can have an income that is $2,000 higher. A single parent with two or more children could receive a federal tax refund as high as $4,536.
Through the federally funded EITC, Virginia workers receive millions of dollars in refunds. In 2003, more than 475,000 Virginians took advantage of the federal EITC, bringing more than $825 million into the Commonwealth. The tax refund helps communities on all levels. It is estimated that more than 80% of the refunds are spent in local communities. However, there are still many eligible workers who miss out on the credit when they file their federal tax returns because they don't know about the credit or they don't know how to claim it. There may be a language barrier. Perhaps they have been told they didn't need to file taxes because their income was too low.
A team headed by the Virginia Community Action Partnership, along with the Internal Revenue Service and the Virginia Department of Social Services, is working to raise statewide awareness of the EITC program through the Virginia CASH Campaign (CASH stands for Creating Assets, Savings and Hope). By linking the EITC with other savings programs, we aim to build assets encourage saving for home ownership, college education, and starting a business.
As the 2006 tax season nears, our team is assembling a toolbox of outreach materials that local agencies and coalition partners can easily adapt to reach individuals in their communities. This will help raise awareness among eligible individuals and tax preparation volunteers. By spreading the word about EITC and educating workers, employees, clients and consumers, we can make a positive impact on the lives of low and moderate-income workers.
Starting in mid-January 2007, many community groups throughout Virginia will be providing
free income tax preparation services to low and moderate-income workers. Coalitions located throughout the Commonwealth include community volunteers who are trained and certified by the IRS to help fellow Virginians maximize their tax refunds.
Volunteers are needed to help provide free tax preparation services and to help raise awareness of
free tax preparation services and the EITC in local communities. A very successful method of raising awareness is to encourage employees to volunteer to be trained as tax preparers and help local coalitions provide information about the EITC.
To learn more about
coalitions in your area that provide free tax preparation services, contact Carolyn Spohrer, EITC Project Manager at 804-644-0417.
