How Key Tax Credits Promote Economic Empowerment

April 1, 2014

This post originally ran March 7, 2014 on YWCA USA's blog at www.ywcablog.com 

While the beginning of March means that spring is almost here, it also represents the midway point of the tax season, and a good time to highlight the importance to women and families of the Earned Income Credit (EIC) and the Child Tax Credit (CTC), federal tax benefits for people who work. In addition to helping taxpayers meet their basic needs such as groceries, utilities, and other bills, the credits can also put eligible workers on the path to securing better housing, dependable transportation, and quality child care, pursuing higher education, or covering out-of-pocket health care costs. The EIC and CTC lifted an estimated 10.1 million people out of poverty, including 2.8 million women and 5.3 million children, in 2012.

Research demonstrates long-term benefits to claiming refundable tax credits, especially the EIC. Children in families that claim the EIC perform better in school and are more likely to attend college. In addition, claiming the EIC is associated with improved health outcomes for children and adults.

These tax credits are a critical component of economic empowerment: with 41 percent of adult women living in households that lack economic security, the EIC and CTC can provide a much-needed income boost.  Yet, the IRS estimates that nationwide, 21 percent of eligible workers don’t claim the EIC because they don’t know about it, don’t know that they are eligible, or don’t know where to get help.

Many of those filers turn to commercial tax preparers. But tax preparation fees along with products offering “quick refunds” can drain tax refunds of $200 or more. As an alternative, the IRS-sponsored Volunteer Income Tax Assistance (VITA) program trains volunteers to provide free tax help in communities across the country. Free tax preparation is also available through AARP Tax-Aide.
The Center on Budget and Policy Priorities invites you to join its National Tax Credit Outreach Campaign to promote the EIC, CTC, and free tax help. Here are three ways you can get started:
  • Request a FREE copy of the Tax Credit Outreach Kit. This Kit provides materials and information needed to conduct community outreach to promote the EIC, CTC, and VITA.
  • Find out what is happening in your community. Learn who benefits from the tax credits in your state.
  • Contact your local tax credit outreach coalition to determine what outreach activities are already taking place in your area. Many coalitions also prioritize asset development and financial stability as goals.

Inform others about the tax credits and free tax help. Distribute flyers available in 21 languages; share infographics about the impact of the credits and VITA; or disseminate other materials to get the word out.
No coalition in your area? Interested in learning how you can integrate tax credit outreach activities into your work? Have something else in mind? Send an email to eickit@cbpp.org for assistance.

Roxy Caines is Senior Project Associate for the Center on Budget and Policy Priorities’ National Tax Credit Outreach Campaign.
 
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