May 2010 U.S. Poverty Action

Discovering (and Sharing) the Impact of the Earned Income Tax Credit and the Child Tax Credit in Our Own Communities

Note: If you have not taken the April Action urging Congress to preserve improvements to the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), we urge you to do so. It is important that members of the House Ways and Means and Senate Finance Committees hear from their colleagues about the importance of these expanded credits. Once you’ve submitted your letters, follow up with phone calls to the House and Senate tax aides for your members of Congress. Have a conversation with them about the importance of these credits and ask what their bosses intend to do to support them in tax legislation this year. You can find out the names of these aides on our Elected Officials page of the RESULTS website. Just pull up each member of Congress and click on the “Staff” tab above his/her picture.

Contact and Visit Your Local Volunteer Tax Preparation Site (May Action)

1. Find contact information for your local Volunteer Income Tax Assistance (VITA) programs. If your group is not already connected to local VITA programs, the National Community Tax Coalition will help you get connected:

2. Call them and introduce yourself as a RESULTS volunteer in the community.

3. Tell them that your RESULTS groups across the country are lobbying Congress to expand Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). These low-income tax credits are helping keep millions of Americans out of poverty, including millions of children.

4. Let them know how their expertise can help Congress better understand the importance of these tax credits.

5. Set up a site visit for your RESULTS group, or arrange for a meeting between your group and a VITA representative.

6. During the meeting, find out more about the impact of EITC and CTC on families locally. Here are some questions you can ask during your conversation:

  • How many people do you currently serve?
  • What are the demographics of the people that you serve? (i.e. race, gender, socioeconomic status, etc.)
  • Is there a strong demand for VITA centers in your community?
  • What are the benefits to having a VITA center in the community?
  • What is the feedback from the community about your local VITA centers?
  • What are some of the barriers that you have in serving your clients?
  • I think many members of Congress want to know how low-income tax credits help working families make ends meet and reduce poverty. Can you give me some examples I can share?
  • In particular, do you have any data or examples of how recent expansions of the EITC and CTC have helped families locally?
  • What are some of the barriers and struggles that you hear from your clients about the current tax code? What do they like about the current tax code?
  • One way that we like to advocate is by helping those directly impacted by policies tell personal stories that can bring the emotion appeal to the issues that we face, or relay their stories. Do you know of any personal stories of your clients that may express that? Or, would any of them perhaps be willing to participate in a meeting with a member of Congress to tell their story?
  • How can we work more closely together in the future to support your work? (You might offer to train clients in advocacy skills, share the latest legislative information from Washington, etc.)

7. Follow up to thank them for their time and let them know how your RESULTS groups is using the information in our advocacy work.

Contact Meredith Dodson ([email protected]) or Girmay Zahilay ([email protected]) for questions about and feedback from your visits.

Working with VITA Groups Could Make Your Case Stronger

To better understand the critical role that the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) play in your community, we strongly urge you to visit or call your local VITA center and speak to someone about the work they do and their needs to better serve hard working, low-income families. After speaking to a VITA representative, your RESULTS group will have concrete material (success stories and community-specific data) to use for your letter writing, face to face meetings, follow-up phone calls, and any other lobbying you do with Congress.

VITA, Stopping Poverty One Taxpayer at a Time: an Overview from the National Community Tax Coalition

Community Volunteer Income Tax Assistance (VITA) programs offer free tax help and related financial services to low-income individuals and families. During the 2009 filing season, VITA programs (over 4,300 VITA sites nationally) directly served over 1.2 million underserved taxpayers, including low-wage workers, persons with disabilities, the elderly, Native Americans, rural populations, and those with limited English-language skills.

Since 2000, the IRS’s Stakeholder Partnerships, Education and Communication (SPEC) office has administered the program in partnership with community organizations, non- profit foundations, municipalities, as well as financial and educational institutions.

During the 2009 filing season, Community Volunteer Income Tax Assistance (VITA) programs (from NCTC Fact Sheet):

  • Filed 1.2 million federal tax returns and prepared over 400,000 EITC returns in 2009, which helped clients claim $1.6 billion worth of federal tax refunds.
  • Saved families an estimated $220 million in tax return preparation costs in 2009.
  • Pioneered asset development services for low-income workers at tax sites across the country
  • Spearheaded successful efforts to establish the IRS VITA Grant Program which provides much needed federal funding for community-based tax preparation programs.

Using Local Data and Stories to Make the Case for Expansion of EITC and CTC

President Obama promised to extend the Bush tax cuts (which are set to expire at the end of 2010) for the middle class. In fact, congressional committees have already started forming a tax package to address these impending expiration dates and we may see legislative action as early as June. As Congress begins to take action, it is our job to ensure that in addition to working for the middle-class the tax code also builds financial security for low-income Americans by extending newly-enacted benefits through EITC and CTC. The 2009 economic recovery bill, the American Recovery and Reinvestment act (ARRA), expanded the EITC to help married couples and larger families. Also, the recovery bill lowered the eligibility threshold for the CTC, so more low-income families could claim the credit. In 2009, the EITC helped 7 million low-income workers and kept 3 million people out of poverty. In addition, lowering the CTC threshold helped 26 million low-income children and their families get much-needed income support. These expansions will expire at the end of 2010. If allowed to happen, 600,000 children alone could fall into poverty from losing their CTC. We must act quickly, powerfully, and strategically in order to send a resounding message that low-income individuals and families cannot get left behind.

Although Congressional staff have been taking the initial steps behind the scenes, they are not expected to make definitive movement on tax legislation until after the Memorial Day recess later this month. This is a great time for us to prepare by deepening our knowledge of these tax credits, raising awareness about their benefits, and joining with other partners in this cause.  This month, we want you to reach out to VITA site coordinators to learn more about what they are doing to help people in your community. Many VITA sites can provide not only an overview of how they work and who they serve, they can also provide you statistics on average income levels of their clients, how many returns they process, how much money in refunds they bring back to the community, and how much of those refunds are EITC and/or CTC money. Then, when you are meeting with your members of Congress either in your state or in Washington DC during the RESULTS conference, you can share information about how important these sites are to your community and the concrete improvements they’ve witnessed due to the expansions of EITC and CTC— and even get families who are impacted to share their experiences directly. Because Congress will adjourn on October 8, we have a narrow window of opportunity.

We will discuss low-income tax credits on the May 2010 National Conference Call — Saturday, May 8th at 12:30 pm ET. Our guest will be Hannah Callahan, a VITA coordinator from Lincoln, NE. To participate, call (888) 409-6709 with your group by 12:28 pm ET.

To close, let’s remind ourselves what’s really at stake for low-income families with this story from the Tax Campaign branch of Just Harvest in Pittsburgh:

A young Arabic family of four (two parents, two kids) was just barely scraping by on an annual income of $16,353. The father is a cashier at a gas station and the mother stays home with the kids. They searched for their local VITA site and went in to get help with their taxes. In the end, they qualified for the maximum EITC for their family size of $5,028. And because of the stimulus-related changes in the Child Tax Credit, their CTC this year is the maximum $2000; under previous law, they would have only gotten $1,178. So together, their EITC and CTC payments boosted their annual income by 43%. Their total refund was a staggering $9,185! Imagine how this will improve their quality of life and what kind of doors it will open in their children’s futures.