Earned Income Tax Credit (E.I.T.C.) Presenters: Wayne Tormala, City of Phoenix Nichole Ayoola, City of Mesa Steve Wise, Tempe Community Council

Earned Income Tax Credit Largest Federal Tax Benefit Program 32 Billion Dollars in Tax Refunds Lifted nearly 5 Million out of Poverty!! Work Incentive vs. Public Assistance

Who Can Receive E.I.T.C.? Eligibility for the credit and the size of the credit is determined by a family’s income and number of dependents. For 2003, the maximum family income will be $34,692 and the maximum $4,204 Undocumented workers are not eligible for E.I.T.C. but can receive Child Tax Credits- ITIN Single persons with very low incomes also qualify for a small E.I.T.C.

E.I.T.C. CHALLENGES Lack of awareness of the program Transaction costs Predatory Practices….  Check-Cashing Operations  Rapid-Refund Loans  High Commercial Fees

Impact of E.I.T.C. in Phoenix 3 5,000 Workers are NOT Receiving the Financial Boost $ Million of Unclaimed E.I.T.C. PHOENIX IS MISSING THIS ECONOMIC BOOST!!

Impact of E.I.T.C. in Mesa O ver a half million dollars in total refunds (EITC & other refunds) returned to residents 5 48 families assisted (filings for ’02) 2 34 families received E.I.T.C. (filings for ’01)

Impact of E.I.T.C. in Tempe/Guadalupe 4 43 returns filed O ver $340,000 returned in E.I.T.C. –average of $1,056

How People Use Their EITC… Pay Bills Make Significant Purchases Homes Auto Education & Training

Research included Best Practices in Cities Nationwide…. Kansas City C hicago San Antonio H ouston D es Moines Denver Baltimore Oklahoma City Indianapolis Miami Louisville Tulsa

Proposed Phoenix E.I.T.C. Campaign Public Awareness Targeted Communities Asset Building Education

Media Alerts Schools Utility Companies Employers Churches Public Forums Public Awareness

Website News Radio Television Fliers in the community Direct mail letters Marketing Ideas Used in Mesa

Financial Literacy Training Individual Development Accounts Asset Building Education

Low Income < $30,000 12,000 7,000 2,000 Targeted Communities Maryvale South Phoenix

Zip Code Total Sum EIC TY2002 as of 4/15/ % Census Low Income $(avg EITC) of non-EITC filers 25% Census Low Income $ of non- EITC filers % of Total Spanish Speak Only Tax Prep Fees and/or RALs (Paid $150 avg. Sum of EITC TY $10,303,800$1,080,532$2,701, %727,200$9,326, $6,677,654$581,884$1,454, %457,200$5,851, $11,629,586$1,180,415$2,951,0398.9%822,600$10,332, $5,635,923$441,027$1,102,5674.5%412,950$4,831,462 $34,246,963$3,283,858$8,209,645 $2,419,950$30,341,586

Low Income < $30,000 12,000 7,000 2, Zip Code Total Sum EIC TY2002 as of 4/15/ % Census Low Income $(avg EITC) of non-EITC filers 25% Census Low Income $ of non-EITC filers % of Total Spanis h Speak Only Tax Prep Fees and/or RALs (Paid $150 avg. Sum of EITC TY $2,537,137$495,566$1,238, %188,550$2,406, $9,696,377$3,061,004$7,652, %511,050$6,682, $8,610,574$671,321$1,678, %601,050$7,690, $11,304,268$1,344,573$3,361, %759,600$10,249,763 $32,148,356$5,572,463$13,931,157 $2,060,250$27,029,382

2. Increase Utilization 3. Reduce Transaction Costs 1. Increase Public Awareness GOALS….

ADDITIONAL E.I.T.C. CHALLENGES Volunteer Management Community Education Technology Bringing in the Business Community

E.I.T.C. in Mesa – looking forward I ncrease access to E.I.T.C. 4 8 active E.I.T.C. volunteer income tax preparers A dvocacy C oalition-building O utreach C apacity-building

E.I.T.C. Experience in Tempe Responsibilities IRS handles the taxes & tax training City handles the community coordination & any specialized volunteer training Two parts Public relations Completing returns

BIG issue -TECHNOLOGY MOBILIZE your resources early! Don’t underestimate volunteer response THINK REGIONAL when picking tax prep sites Tie in with other VITA sites - you will need them Remember -results are tangible (including tax refunds & other tax credits) Tempe’s Tips

Local & State Govt. Businesses Employer s WORKIN G POOR Banks E.I.T.C. Who Benefits?

E.I.T.C. Available Local Resources + Implemention = IMMEDIATE effect on local community

Earned Income Tax Credit (E.I.T.C.) The following individuals are available to visit your municipality/organization and provide further information on establishing an E.I.T.C. program in your area. Wayne Tormala, City of Phoenix (602) Nichole Ayoola, City of Mesa (480) Steve Wise, Tempe Community Council (480)