Earned Income Tax Credit (EITC) Presented by: Tempe Councilmember Dennis Cahill, Chair Human Services Coordinating Committee Nichole Ayoola, City of Mesa Kate Hanley, Tempe Community Council Wayne Tormala, City of Phoenix

What is the Earned Income Tax Credit?  Refundable tax credit for low-income working individuals and families  Can be claimed if the individual does not owe any tax at all  Up to $4,204 can be received for 2003  A first-time applicant can apply for 2001, 2002, and 2003 – potential for total return of approximately $10,000

Who qualifies for EITC?  Low-income workers – must have earned income  Ages (21 if children in household)  Single or married, with or without children  Requires a valid social security number  Non-citizen workers with Individual Taxpayer Identification Numbers (ITIN) are not eligible for E.I.T.C. but can receive Child Tax Credits

What’s in it for us?

Why is EITC a Win-Win situation?

Mesa  What’s in it for Mesa residents?  Returns cash to hardworking individuals and families  Allows dialogue about financial literacy and encourages savings and asset building  What’s in it for the City of Mesa?  Method to assist low-income working families gain education  Brings much-needed sales tax back to the City at a time of declining resources

More About Mesa  $260,057 in EITC funds returned to Mesa residents who used VITA sites (tax year 2002)  Over a half million dollars in total refunds (EITC and other refunds) returned to Mesa residents who filed with the assistance of VITA sites in Mesa  548 Mesa families received free tax assistance through VITA sites

Tempe  $340,323 returned to Guadalupe & Tempe residents who used VITA and TCE sites  443 returns filed at VITA sites (not all qualified for EITC)  Tax Year 2002 statistics

More About Tempe  Needed – a strong City leadership role  The City of Tempe did all of the following:  Recruited volunteers from City staff  Allowed volunteer time for City employees  Recognized volunteers  Provided space, hardware, and technical help

Phoenix  Impact  35,000 workers are not receiving the financial boost  $25-64 million of unclaimed EITC  EITC campaign involves:  Public awareness  Asset building education  Targeted communities

Who Benefits? Businesses Banks Local & State Government Working Poor EITC Employers

Revenue to your communities Tax credit dollars help residents:  Pay monthly bills  Purchase major items  Automobiles  Homes  Pay tuition for themselves & their families

What resources are necessary to develop a VITA site?  Early public awareness/community mobilization  Computers  Volunteers (IRS handles the tax training)

How can a city help market EITC?  Inform employees about importance of EITC by placing inserts or notices in paycheck envelopes  Reach out to:  Chambers of commerce  Workers without children  Non-English speaking communities  Market the program locally through cable television, schools, municipal newsletters, civic organization newsletters

Timeline Targets for EITC  December -Flyers in employee paychecks -Volunteer recruitment  January/February -Train recruited volunteers -Locate easy access facility for tax preparation  February -Volunteers begin tax preparation -Heavy marketing through local groups

The IRS is prepared to partner with any of the municipalities. A special thanks to the following people for being present today and available for questions: IRS:Mary Burke, Sharon Taylor-Ward To find out who the IRS contact is for your community, contact Patrick Reidy, territory manager, at People from various municipalities are also willing to talk to you about their EITC experiences: Nichole Ayoola, City of Mesa Kate Hanley, Tempe Community Council Wayne Tormala, City of Phoenix