The tax-filing season has arrived, and while taxpayers are asked to gather up their records from last year to prepare to file the income tax reports for 2009, some local advocacy groups are preparing a campaign to provide free tax return preparation for low- and moderate-income persons in the neighborhoods.
There is a significant tax relief program, the Earned Income Tax Credit (EITC), that continues to be under-utilized, and the groups plan an effort to expand the number of people who avail themselves of the program. The EITC is a refundable federal income tax credit for low- to moderate-income working individuals and families, and it has been part of the federal tax laws since 1975 when Congress established it in part to lessen the tax burden of the increased social security taxes, and to provide an incentive to work. In brief, the IRS rules states: â€œWhen the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.â€
ABCD, Bostonâ€™s anti-poverty agency, is joining with the IRS, the city of Boston and a network of local non-profit agencies to train volunteers in the details of the EITC. Working together, this coalition will sponsor free tax prep clinics at 28 sites across the city.
â€œYou know itâ€™s January when EITC kicks off,â€ ABCD spokesperson Susan Kooperstein says. â€œThis is probably the best ongoing economic stimulus program ever for low-income working people. Once again, there is a statewide coalition backing up EITC outreach and services.â€
Kooperstein says they are now recruiting volunteers to help staff the tax sites, â€œto help people access the funds they are entitled to,Â free of charge, so theyÂ donâ€™t pay for tax preparation services or fall prey to exorbitant refund anticipation loans (RALs).â€ The coalition has operated a Volunteer Income Tax Assistance (VITA) program for ten years.Â
â€œVolunteers are needed throughout the state to help low-income taxpayers prepare and file their tax returns,â€ Kooperstein explains. â€œNo experience is necessary to become a volunteer and all training is provided. Each volunteer will receive tax law training and electronic filing software training to prepare basic income tax returns. Other volunteer opportunities with VITA are available. Volunteers are asked to volunteer an average of three to five hours per week from mid-January through April 15 at a local VITA site.â€
To volunteer, contact ABCD at 617-348-6586, or bostonabcd.org, or the city of Boston at 617-918-5259, or bostontaxhelp.org.
The EITC in Brief
To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments. You have to meet the following requirements:
â€¢ Must have a valid Social Security Number
â€¢ You must have earned income from your job, working for yourself ,or another source.
â€¢ You must be a U.S. citizen or resident alien all year, or a non-resident alien married to a U.S. citizen or resident alien and filing a joint return.
â€¢ You cannot be a qualifying child of another person.
â€¢ Can have only limited amount of investment income; see EITC Income Limits, Maximum Credit Amounts, and Tax Law Updates for the amount.
Earned income and adjusted gross income (AGI) must each be less than $43,279 ($48,279 married filing jointly) with three or more qualifying children, $40,295 ($45,295 married filing jointly) with two qualifying children, $35,463 ($40,463 married filing jointly) with one qualifying child, or $13,440 ($18,440 married filing jointly) with no qualifying children. Investment income must be $2,950 or less for the year. The Tax Year 2009 maximum credit ranges from $457 to $5,657.
â€“ Ed Forry