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Outreach effort of South Hampton Roads EITC Coalition
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Collaborations with:
o IRS
o South Hampton Roads Earned Income Tax Coalition
o AARP Tax Aide
o United Way
o Community Leaders like You
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Chris Neighbor – IRS SPEC
Sharon McDonald – Norfolk Commissioner of Revenue
Sharon Gares – AARP
Teresa Walker – Virginia Saves
Mark Campbell – IRS Tax Advocate
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History of EITC Credit and its necessity in helping people in
poverty
o Established in 1975 to offset Social Security Tax burden
and to provide incentive to work
o Refundable Credit available to low and moderate wage
workers
o Credit available even if no other filing is required
• Example: A low income family may not have
sufficient income to be required to file, but if they do
not file they do not gain access to the credit.
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History of EITC Credit and its necessity in helping people in
poverty
o Nation’s largest anti-poverty program for working
families
• 27 Million Households 2011 (2010 Tax Year) Source:
eitcstats
• $60 Billion 2011 (2010 Tax Year) Source: eitcstats
• Study by Dowd and Horowitz 2011 found ½ of all
taxpayers with children received the EITC at some
point. This credit has a broad reach.
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Virginia
o Impacts 590,000 Households
o Refunds $1.25 Billion
Earned Income Tax Credit NOT refundable to taxpayer for
Virginia State Tax
The Virginia Office on Volunteerism and Community Service
estimates the value of volunteer time to be $24.29 per
hour. VITA volunteers throughout Virginia contributed over
50,000 hours to the program. ($1 million value).
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New in 2013:
o Refunds in the Commonwealth of Virginia will not be
issued via check. All refunds must be automatically
deposited to an account.
o For taxpayers who do not provide an account, a prepaid
card will be issued.
Virginia offers free fillable forms with no income or age
qualifications.
Low Income families can use efile options available at
Virginia Department of Taxation website.
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Each City Commissioner of the Revenue Office offers State
Tax Preparation services
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Some Commissioners offer federal tax preparation services
as well
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State Tax Website: www.tax.virginia.gov
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Data analysis provided based on data provided by IRS for
the tax year 2010.
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Databook available at www.shreitc.com
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CHESAPEAKE: there is potential for the EITC to bring $48.5
million into the local economy. In tax year 2010 nearly $39
million was refunded as a result of this credit.
NORFOLK and PORTSMOUTH: more than 70% of total refunds
are to low income potentially EITC eligible tax payers
FRANKLIN AND ISLE OF WIGHT: more than 30% of all returns
were EITC eligible and 68% of all refund dollars were attributable
to the EITC.
SUFFOLK: 37% of all returns prepared claimed the EITC while
58% of all returns were attributable to low income households.
VIRGINIA BEACH: the most populous city in the area, has the
greatest number of EITC eligible households at 35,461 receiving
more than $74 million in refunds in 2010.
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More than 66% of all households in South Hampton Roads
in 2010 were eligible for the Volunteer Income Tax
Assistance (VITA) program.
A large number of these households would also be EITC
eligible.
Key Beneficiaries of EITC
Industries
o Disabled workers
o Young Families
o Displaced workers
o Military
•
•
•
•
•
•
Service
Retail
Hospitality
Call Centers
Construction
Administration
REGION BY INCOME
AGI > 50,000
34%
AGI
>25000<50000
26%
AGI <$25000
40%
REGION BY REFUNDS
Total EIC+CTC
37%
Other Refunds
63%
TAX CREDITS BY CITY
$160,000,000
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$-
Chesapeake
Frankin-IOW
EITC Refund
Norfolk
CTC Amount
Portsmouth
Suffolk
Add'l CTC Amount
Virginia Beach
Tax and Refund Trends
$3,500,000,000
$3,000,000,000
$2,500,000,000
$2,000,000,000
$1,500,000,000
$1,000,000,000
$500,000,000
$2007
Total Tax
2008
Refunds
2009
Linear (Total Tax)
Linear (Refunds)
2010
Thousands
Households Claiming Credits Trend
140
120
100
80
60
40
20
-
Returns EITC
Returns CTC
2007
2008
2009
Returns Add'l CTC
2010
% Request Refund Anticipation Loan or Refund Anticipation
Check
21.5%
21.0%
20.5%
20.0%
19.5%
19.0%
18.5%
18.0%
17.5%
17.0%
2007
2008
2009
% Request RAL or RAC
2010
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What does EITC mean for the local economy?
o EITC refundable credit enables low wage workers to
remain self-sustaining.
o Credit often used to catch up on outstanding bills, bring
current rents and to save for repairs and other major
expenses.
o Savings on tax preparation and avoidance of tax loan
products provides more funding for necessary household
expenses.
o Refunds are recycled into the local economy
Estimated EITC Amounts Claimed and Unclaimed by VDSS Clients,
and Number of Households by Locality, 2010
EITC Claimed
Households
EITC Unclaimed
Amount
Households
% Eligible
Households
Claiming EITC
Locality Name
Amount
Norfolk city
$
27,786,786
9,134 $
6,889,087
4,224
68%
Virginia Beach city
$
20,048,172
6,894 $
5,482,738
3,119
69%
Chesapeake city
$
13,726,524
4,515 $
3,387,280
1,914
70%
Portsmouth city
$
13,102,597
4,266 $
3,204,651
1,925
69%
Suffolk city
$
7,130,754
2,306 $
1,698,447
1,011
70%
Isle of Wight County
$
2,138,185
732 $
517,777
289
72%
Franklin City
$
1,308,260
431 $
789,760
439
63%
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Virginia Department of Social Service Estimates:
o $
21,969,740 unclaimed EITC for DSS clients in South Hampton
Roads
o 12,921 Households
o More than 70% of these households did not file a tax return
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IRS Estimates:
o 20 – 25% of families eligible for EITC do not receive the credit
o At 20% - Missed potential for local families - $57,838,826
o At 25% - Missed potential for local families - $77,118,435
To get a full copy of the analysis or this presentation visit:
www.shreitc.com
Qualifying for EITC
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To qualify for Earned Income Tax Credit or EITC, you and your spouse if married and
filing a joint return, must meet all of the following rules:
Have a valid Social Security Number
Have earned income from employment, self-employment or another source
Cannot use the married, filing separate filing status
Must be a U.S. citizen or resident alien all year or a nonresident alien married to a
U.S. citizen or resident alien and choose to file a joint return and be treated as a
resident alien
Cannot be the qualifying child of another person*
Cannot file Form 2555 or 2555-EZ (related to foreign earned income)
Your Adjusted Gross Income and earned income must meet the limits shown on the
Income Limits, Maximum Credit Amounts and Tax Law Updates Page
Your investment income must meet or be less than the amount listed on the
Income Limits, Maximum Credit Amounts and Tax Law Updates Page
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EITC Income Limits- 2012
o $45,060 ($50,270 married filing jointly) with three or more
qualifying children
o $41,952 ($47,162 married filing jointly) with two qualifying
children
o $36,920 ($42,130 married filing jointly) with one qualifying
child
o $13,980 ($19,190 married filing jointly) with no qualifying
children
o Investment income must be $3,200 or less for the year.
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EITC Maximums 2012
o $5,891 with three or more qualifying children
o $5,236 with two qualifying children
o $3,169 with one qualifying child
o $475 with no qualifying children
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EITC Qualifiers – how do people become eligible for EITC
o Income Qualifier
o Family Size
o Wages
o Tool: EITC Assistant
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Other Credits supporting the same Demographic
o First Time Homebuyer Credit
o Adoption Credit
o Child and Dependent Care Credit
o Lifetime Learning Credit
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IRS Resources available to assist families
o Stakeholder Partnerships, Education and
Communication (SPEC)
o IRS Office Services
o Tax Advocate Service
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VITA –SHREITC
o Website: www.shreitc.com
o Tax Preparation Locations
o Phone 1-888-664-6116
o Community Support
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AARP Foundation Tax-Aide: Available to taxpayers with lowand moderate-income
‘Special attention’ to those age 60 and over
Prepared over 10,000 Federal and over 10,000 Virginia
returns
Central Library Virginia Beach is 2nd largest Tax-Aide site in
USA
o 4,932 Federal, 4,812 State
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Tidewatertaxaide.com
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Chesapeake, Virginia
Cuffee Library
Operating Hours: Thurs, Fri, Sat, 10 AM to 2 PM
Great Bridge Presbyterian Church
Operating Hours: Tue & Wed, 9 AM to 2 PM
Russell Memorial Library
Operating Hours: Mon, Tue, Wed & Fri, 9 AM to 3 PM
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Norfolk, Virginia
o Norfolk Fitness and Wellness Center
Operating Hours: Mon, Tue, Thurs, Fri 10 AM to 3 PM
o Wed 10 AM - 6 PM BY PRIOR ARRANGEMENT
o Sat 10 AM - 2 PM
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Portsmouth, Virginia
o Churchland Library
Operating Hours: Mon, Wed, & Thu, 10 AM to 2 PM
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Suffolk, Virginia
o Workforce Development Center
Operating Hours: Tue, Wed, Thurs. 12:30 PM to 3:30 PM
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Virginia Beach, Virginia
o Princess Anne Library
• Operating Hours: Mon & Wed, 10 AM to 2 PM, Thurs, 3 PM - 6 PM
o Virginia Beach Central Library
Operating Hours: Mon, Wed - 10 AM to 6 PM; Tue, Thurs - 10
AM to 8 PM; Fri, Sat - 10 AM to 4 PM
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My Free Taxes – United Way
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Online self preparation
Volunteers Assist by phone
Income limit $57,000 Household AGI
Made possible by Walmart Grant
 Facilitated
Self Assistance–
o Virginia Beach Human Services
o NSU
o ODU
 Special
Events
o EITC Day
• January 25th, Norfolk Workforce Development Center
o Super Saturday Tax Preparation
• February 23rd, 2013 Youth Employment Center Pembroke Mall
o IRS Website Resources www.irs.gov
• Fillable forms
• FreeFile Alliance Software
• Locations of VITA Sites nationwide
• Education Resources
o Virginia State Tax Website www.tax.virginia.gov
• FreeFile Federal and State
o SHREITC Website www.shreitc.com
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1099’s
Impact of Settled Debt
Impact of Retirement Distributions
Separated Parents both claiming children
Young Adults claimed by parents
Documentation of Expenses
What is needed at VITA Site
o Have a handout
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Programs partnering with tax sites to expand financial
empowerment efforts
o Virginia Saves
o Virginia Beach Financial Empowerment
o United Way Financial Stability
• 70+ Agencies supported
o Virginia Individual Development Accounts (VIDA)
o FDIC Website
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Involvement in Coalition
o Ongoing support necessary to extend outreach
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Promotion
o Increase Community Awareness
o Invitations to meetings where we can speak
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Volunteering
o Online training
o Greeters
o Contact Sheets
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Referrals
o Roving Site
o FAS Sites
o Appointment Sites