To say the Earned Income Tax Credit (EITC) can make or break a family’s income for the year, is not an understatement. For the 2013 tax year, the average refund in Oregon was over $2,000.That’s why NeighborImpact recognized the national event last week. EITC puts cash in the pockets of low- and moderate-working families and helps stimulate Central Oregon’s economy by creating jobs and economic opportunities.
“The Earned Income Tax Credit, which is claimed through tax filing, is only available to individuals who have earned money from working and is a proven incentive to encourage people, especially single moms, to join the workforce,” says Scott Cooper, NeighborImpact’s executive director.
The IRS estimates that more than 27 million citizens received over $65 billion in federal, refundable credits in tax year 2013. For example, a worker with no children who made less than $14,340 received up to $487. Single parents with three or more children who made less than $46,227 were eligible for $6,044. Couples who earned less than $19,680 qualified for a credit of $487. Those with three or more children qualified for $6,044 if they made less than $51,567.
United Way of Deschutes County manages the local tax filings for EITC and other programs, such as the child tax credit. NeighborImpact is partnering with United Way by providing space in its Bend and Redmond offices for tax preparers to help local clients. This is an essential service for the unemployed, working families living at the margins, and seniors with limited means.
As Cooper explains, tax preparation fees may erode buying power or be out of reach completely: “By partnering with United Way to offer tax preparation services, NeighborImpact helps to make filing taxes affordable and within reach of everyone.”
Reducing poverty is particularly important for young children. Children lifted out of poverty at an early age tend to pursue more education, work more hours and earn more money as adults compared to children who remain in poverty. EITC is an effective poverty-reduction tool that creates an incentive for workforce development.