Make Tax Time a Happy Time!

The Earned Income Tax Credit, popularly known as the E.I.T.C., has a two pronged purpose: to increase the income of low and moderate-income families and to reduce their taxes – to make work pay and to reward low-wage work. It is an inducement for parents to expand their part-time work hours to a full 40 hour week because the refundable tax credit grows with each additional dollar of earnings. A refundable tax credit provides a cash refund (after taxes have been collected), which is mailed in the form of a check or is deposited directly into the taxpayer’s checking or savings account.

In order to receive the cash Earned Income Tax Credit, 1) one must have produced Earned Income during the previous year and 2) one must file an income tax return. Data over the years have consistently shown that the E.I.T.C. program lifts more children’s families above the federal poverty line than any other single program or categories of programs. Data show that in 2005 the E.I.T.C. lifted more that four million children out of poverty.

In January, 2005, Cuyahoga County began funding the work of the Cuyahoga E.I.T.C. Coalition.

The number of E.I.T.C. claims has grown significantly since 2005 because the funding has allowed the individual agencies in the Coalition to establish a broad network of sites that offer free preparation of income tax returns. The tax preparation sites serve as a magnet for attracting workers potentially eligible for the E.I.T.C. It is not only a very efficient way of identifying those eligible for the credit and ensuring that it is claimed, it also saves low-wage workers the predatory costs of Refund Anticipation Loans and the often exorbitant fees of commercial tax preparers. Each taxpayer’s information is screened for eligibility for the E.I.T.C. and child tax credit. Last year, operating out of 34 tax sites, coalition members completed 5,600 returns that represented $6.8M in refunds - dollars that are immediately recycled into the local economy. For information on the location of free tax sites, call 2-1-1 First Call for Help or visit the following websites: www.employment@cuyahogacounty.us or www.refundohio.org