THE EARNED INCOME TAX CREDIT, A LITTLE-KNOWN BENEFIT FOR PEOPLE WITH DISABILITIES by Melanie Brunson and Richard Keeling

By the time you read this, we will have observed the end of another year, and ushered in a new one. However, for many of us, the old year doesn’t actually get put behind us until we have made our little contributions to the IRS. Since the completion of tax returns will be on the minds of many Forum readers soon, if it isn’t already, I thought it timely to share some information with you about a little-known opportunity that many of you may be able to take advantage of. I received this information from a good friend of ACB’s, Richard Keeling of the IRS Office on Stakeholder Partnerships, Education, and Communication (SPEC). Since the information is timely, I will include his article here as the remainder of my column this month. Please read on, and if you have any questions, contact me or the contacts listed below.

Many Americans with disabilities may not be aware of the valuable federal Earned Income Tax Credit (EITC) that can help lift them out of poverty. Approximately 20 percent of Americans live with some level of disability, and many of these people have first-hand experience with financial hardships. In fact, more than one-third of all adults with disabilities live in households with a total income of $15,000 or less according to a National Organization on Disability/Harris Poll. In addition, 83 percent of people with disabilities said they had never claimed an income tax credit or deduction related to their employment or disability.

Enacted in 1975, the EITC is a credit for people who work, but do not earn high incomes. It has lifted millions of individuals and families above the poverty line for years. In 2008 alone, approximately 24 million taxpayers received more than $48 billion as a result of the EITC. The IRS estimates that 15 to 25 percent of American taxpayers who qualify for the credit do not claim it. Many people may be unaware of the EITC or may not claim it simply because they don't know how to do so. It is critical for people with disabilities to understand how claiming tax credits may affect other public benefits they depend on. Thus, outreach to provide workers with disabilities and working families raising children with disabilities clear and accurate information about the availability of the credits and how to claim them is extremely important.

To help combat this crisis, IRS partnered with the National Disability Institute to create the Real Economic Impact Tour or REI Tour. This campaign for people with disabilities is a national initiative delivering financial education, free tax preparation and asset-building services to low-income people with disabilities in more than 100 U.S. cities. The REI Tour is the public and private partnership utilized to join organizations together around the mission of building a better economic future for people with disabilities and their families.

Volunteer Income Tax Assistance or VITA sites are an integral part of the free tax preparation coalitions being formed today. Community partners recruit and train volunteers who then prepare tax returns free for people who cannot do their own returns and cannot afford a paid preparer. Partners host VITA sites in locations that are easily accessible to and trusted by the community, thus attracting an audience of taxpayers —many of whom are eligible for EITC — by offering free tax preparation. Last year volunteers prepared 3.5 million tax returns for low- to moderate-income earners (those making less than $48,000), bringing back $3 billion in refunds as well as saving approximately $1 billion in tax preparation fees and refund anticipation loans. To find a VITA site near you, call the VITA Hotline at 1-800-906-9887. For general tax information, visit www.irs.gov or call 1-800-829-1040.

For more information on EITC, please visit the “EITC Central” web site at www.eitc.irs.gov. This site offers up-to-date EITC data. There is also a “Partner Toolkit” and there you will find an array of general and specialized marketing tools, including templates, statistics, fact sheets, how-to tips, specialized products and links to other helpful resources.

To find out more about the REI Tour, visit www.reitour.org.