eitc and the irs leland smith and brian cahill irs seattle wa contact – your local coalition’s...
Post on 15-Jan-2016
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TRANSCRIPT
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EITC and the IRS
• Leland Smith and Brian Cahill
• IRS Seattle WA
• Contact – Your Local Coalition’s Coordinator
• Sylvia Martinez – IRS SPEC(206)220-5515
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EITC and the IRS
• Free tax Preparation in WA
• IRS Staff & Functions
• Reaching Low Income
• Tax Credits and Financial Education
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EITC aka EIC
• Earned Income Tax Credit
• Enacted in 1975
• Expanded in 1990, 1993, and 2009 (ARRA)
• Refundable!
• Parents with children & Low Income Singles
• Offset Social Security Withholding FICA
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EITC Expanded!
The American Recovery and Reinvestment Act (ARRA)
• Temporary (TY 09 10) increase in EITC• For taxpayers with three or more qualifying
children. • Max EITC for this new category is $5,657
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EITC Expanded!
ARRA also upped the phase out for all married couples filing a joint return.
Phase out:Begins at $21,420 for MFJ with children Gone at:
$40,463 for one child, $45,295 for two children and $48,279 for three or more children.
For MFJ with no children, phase out starts at $12,470 and
Completely phased out at $18,440.
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Income Limits for 2009
• $43,279 ($48,279, MFJ) with 3 or more children
• $40,295 ($45,295, MFJ) with 2 or more children
• $35,463 ($40,463, MFJ) with 1 child
• $13,440 ($18,440, MFJ) with no children
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The Maximum Benefit for 2009
• $5,657 with 3 or more children
• $5,028 with 2 or more children
• $3,043 with one child
• $457 with no children
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EITC is one of the Largest Antipoverty Programs
• 24 million received almost $48 billion for tax year 2007
• Participation is estimated at 75% to 80%
• Five million people, half of them children, lifted out of poverty each year due to EITC
• The cost of administering EITC program ratio to claims paid is less than one percent
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Basic Qualifications
• Have a valid Social Security number
• Not file as “married filing separate”
• Not file Form 2555 or Form 2555-EZ (related to Foreign Earned Income)
• Meet the investment income limitation ($3,100 for tax year 2009)
• Have earned income
• Not be the qualifying child of another person
• Be a U.S. citizen or resident alien for the entire year
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Free Tax Prep in WA
• Coalitions
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Free Tax Prep in WA
• Coalitions
• VITA and Tax Aide◦ Nearly 72,000 returns total free returns,
◦ Nearly 50,000 by Tax Aide
◦ More than 10,000 Military VITA
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IRS Staff & Functions
• Data & Mapping
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Dollars$695,716,346
5,349,297,531
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EITC By Zip Code
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IRS Staff & Functions
• VITA and Tax Aide Site Set Up and Support
• Volunteer Training
• Tax Wise Software
• Materials and tools
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IRS Staff & Functions
• VITA and Tax Aide Site Set Up and Support
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IRS Staff & Functions
• EITC Assistant
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IRS Staff & Functions
• EITC Central
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EITC CENTRAL
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Partner Page
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EITC CENTRAL AGAIN
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Reaching Moderate Income
• Why the IRS needs your help.
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Who are we missing? • Living in rural areas • Self-employed • Disabled • Childless • Not proficient in English (LEP)• Older (grandparents) • Recently divorced, unemployed, or
experienced other changes to their marital, financial or parental status
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EITC By Zip Code Different Scale
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Promote EITC• Insert tax credit information in monthly
utility bills or online newsletters.
• Incorporate tax credit information when promoting energy payment assistance programs.
• Train customer service employees
• Display posters
• Alert your own employees
• Support free tax preparation sites with printers, computers etc.
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EITC and the IRS
Tax Credits and Financial Education
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Tax Credits and Financial Education
• EITC as the “Lab” Portion of the Financial Literacy Class
• The only way to claim EITC is to file a tax return.
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Pub 4716
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Publication 4537, EITC Made EZ bookmark
Publication 4471, EITC Made EZ brochure
Publication 73271N, Social Security Card Poster
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Why is outreach needed?
• As many as 15-20% of eligible workers don't claim the EITC
• 75% of those who claim the EITC pay commercial fees to file returns which can include loan fees and charges for other related products.
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