For years, Camille, a resident of D.C’s Ward 8 had dodged filing her taxes out of fear that her ex-husband would discover their new address. A survivor of intense domestic abuse and a single mother, Camille sheltered her and her two kids from harm’s way at the expense of receiving her tax return; a pocket of money Camille desperately could have used to knock down the debt that was piling over her. Until hearing about the free tax preparation offered at her local Volunteer Income Tax Assistance (VITA) program at the Southeast Credit Counseling Center, Camille didn’t have any way to pay for tax prep and ensure that her identity remained protected.
However, the Southeast Credit Counseling Center helped Camille discover that because of her income bracket, she was eligible to receive the Earned Income Tax Credit, or EITC. Layered on top of her Child Tax Credit, Camille was offered a dramatically larger refund that she used to get ahead of her debt.
The Earned Income Tax Credit, or EITC, provides low-income workers with a percentage based rebate on their taxable income based on their eligible bracket. Though a single household may only retain a maximum of $438 on their income, households with children can get back nearly $5,000. For United Way of the National Capital Area, tax season is a challenge we can surmount by empowering our partners with the tools, education and resources to reach as many households in our region as possible.
Despite a high margin for error—the latest average rounding out to 49%– reports show that a majority of filers continue to opt for private, “unenrolled” paid preparation, a service that usually costs filers a staggering average of $176. This not only results in filers being rejected the credit, but it’s also an expense financially vulnerable individuals are taking up on their own. In juxtaposition, participants taking part in IRS-approved free tax preparation services experience an 89% rate of success, with the applicant receiving the credit. To help mobilize awareness United Way NCA has established a regional EITC Coalition, a partnership in which multiple organizations in the region work collectively to maximize eligible EITC returns. Through VITA programs, individuals receive free tax preparation from volunteers specialized in applying for the credit.
When we talk about the prospect of a household salary of $30,000 potentially getting $5,000 of that back in tax returns, the implications are massive. That’s why United Way NCA has tapped into its partner network to maximize the reach VITA programs can achieve when it comes to EITC assistance.
Camille’s story echoes true for many in the capital region who are eligible to receive the EITC but either don’t have the resources or don’t know anything about it to file it properly. Filing your taxes can be a confusing and lengthy process and for low income individuals in our community without the whereabouts to maximize their returns, it means a significant portion of their financial assets are lost.
Through mobilizing our area VITA partners, United Way NCA was able to support nearly 13,000 participants in accessing free tax preparation services in tax year 2017. Help us spread the word by visiting unitedwaynca.org