EITC and Other Tax Credits / Deductions to Promote Employment, Increased Income and Savings July 2012 1
Learning Objectives Understand the various deductions and credits available to individuals with disabilities and low income working individuals, including: Earned Income Tax Credit (EITC) Child Tax Credit (CTC) Child and Dependent Care Credit Impairment-Related Work Expense (IRWE) Deductions Medical and Dental Expense Deductions Credit for the Elderly or the Disabled Education Tax Credits Saver s Tax Credit Understand how the use of these credits and deductions can increase income and promote financial stability Understand how to link beneficiaries with resources for tax assistance 2
Tax Credits versus Tax Deductions Tax Deductions - reduce the amount of income that is considered taxable. These may be expenses incurred during the year that are allowed to be deducted on the income tax return. Tax Credits - taken from the portion of the earner s income that is taxable and result in a "dollar for dollar" reduction in taxes Tax credits such as the Earned Income Tax Credit are a type of credit (or benefit) that encourage work and earnings. 3
Tax Credits versus Tax Deductions Tax credits are often viewed as being more beneficial than tax deductions of a similar value Credits reduce the tax directly Deductions only reduce income subject to tax. Reducing the taxable income amount means that the actual reduction isn't as great as the credit allowance and thus, it isn't as valuable as a tax credit. Two categories of Tax Credits: Refundable credits: reduce the tax below zero (in other words with this credit a taxpayer may have no tax liability and still receive a refund for example, as in EITC) Non-refundable credits: reduce the tax liability to zero but no refund is due. 4
Promoting Employment and Savings Earned Income Tax Credit 5
What is the Earned Income Tax Credit (EITC)? The EITC is a tax credit for certain people who work and have earned income under $49,078 (in tax year 2011) increased to $50, 270 (in tax year 2012) On tax return, after calculating adjusted income, the amount of tax owed is determined The EITC credit is deducted from the amount of tax owed. If the credit due exceeds the individual s tax liability, it can result in a refund. Maximum credit amounts for tax year 2012: $5,891 with three or more qualifying children $5,236 with two qualifying children $3,169 with one qualifying child $475 with no qualifying children 6
EITC Preview of 2012 Tax Year In 2012, earned Income and adjusted gross income (AGI) must be less than: $45,060 ($50,270 married filing jointly) with three or more qualifying children $41,952 ($47,162 married filing jointly) with two qualifying children $36,920 ($42,130 married filing jointly) with one qualifying child $13,980 ($19,190 married filing jointly) with no qualifying children Investment income must be $3,200 or less for the year. 7
Who is a Qualifying Child for EITC? Son, daughter, grandchild, stepchild or an adopted child, brother or sister; or a descendant of any of these relations such as a grandchild, nephew or niece; Child lives with the taxpayer for more than half the year Child meets age requirements For EITC, under age 19 or under age 24 if a full time student; or any age if totally and permanently disabled The person did not provide more than half of his or her own support during the year (at minimum six months and 1 day) 8
EITC Requirements Must have a valid Social Security Number You must have earned income from employment or from selfemployment. Your filing status cannot be married, filing separately. You 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 filing a joint return. You cannot be a qualifying child of another person (you cannot be a dependent). If you do not have a qualifying child, you must: be age 25 but under 65 at the end of the year, live in the United States for more than half the year, and not qualify as a dependent of another person Cannot file Form 2555 or 2555-EZ (related to foreign earned income) 9
Helping Beneficiaries Determine if They Qualify for EITC EITC Assistant is an IRS tool to help beneficiaries determine if they should claim this credit Go to: http://www.irs.gov/individuals/article/0,,id=130102,00.html Answer a few simple questions to determine: Eligibility Determine if children (if applicable) meet the test for qualifying child Estimate the amount of the credit 10
EITC Earned Income Tax Credit Individuals begin to qualify for the EITC from the very first dollar of earnings! The EITC is a refundable credit. If an individual qualifies based on their income, even when they have no tax liability, they will receive a tax refund. Individuals must file their taxes to receive this refund, even if they do not have any tax liability. If they are filing for the EITC for the first time, they may file to claim the credit for a three-year period. Example: File for EITC in 2012 and can file for EITC for previous years 2011 and 2010 ( if not filed for this before). 11
Examples of Increased Income with EITC Michael is a single CDB beneficiary and has no dependents. He goes to work for the first time in September 2o11 since receiving disability benefits and earns $3,535 (approximately $883 each month). His W-2 shows the federal tax withheld for 2010 was $128. Without the EITC he would have a refund of $128. The value of his EITC when he filed his taxes in 2011 is $270. Since this is a refundable credit, the EITC increases his refund to $398. Jane, a 24 year old SSI recipient is a single parent raising two children by herself and files as head of household on her Federal tax return. Her earnings in 2011 were $12,200. When she filed her taxes in April 2012, She was eligible for an EITC refund of $4,098, a 33% increase in family income. 12
Benefit of EITC The money received as a result of the EITC can be used to build assets By saving the money, or part of the money received as a result of the EITC, one can begin to build assets. For example, the money received as a result of the EITC could be used to establish a relationship with a financial institution (e.g. Opening a Savings or Checking Account). Persons now have the ability to split the refund they receive in up to three different accounts making saving the money easier than ever. 13
Why is the EITC Important? Helps low-income families substantially increase their annual income Helps to reduce poverty more than any other federal aid program Helps individuals increase savings and reduce debt Provides an opportunity to further finance education or training programs. Helps to boost local economies by encouraging/increasing employment Has a positive effect on increasing work behavior 14
IRS National Efforts Nationwide last year, over 25 million people received nearly $58 billion in EITC. IRS estimates between 75% to 80% of those eligible for the credit claim it. Five million people, half of them children, are lifted out of poverty each year due to EITC. An estimated 1 million individuals with disabilities annually do not claim the credit. As with other communities, this number reflects individuals who are not aware of their right to claim. Individuals on public benefits have an added fear of a loss of public benefits when the EITC is claimed. 15
EITC & Benefits: New Legislation! PL 111-312, Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Sec. 728 Passed by Congress in December 2010 Greatly simplifies and standardizes the rules on how tax refunds are treated in determining the eligibility for public benefit programs. 16
New Legislation provides for: Income exclusion: Excludes any federal tax refund from counting as income in determining eligibility, or the amount of benefit, for any federally funded benefit program. Includes state and local programs partially funded by federal dollars. Resource exclusion: Refunds that are saved by the filer do not count against the resource limits of any federally funded public benefit for 12 months after the refund is received. 17
Implementation of New Legislation Tax refunds can include benefits from the EITC, Child Tax Credit (CTC), other tax credits, or refund of a filer s over withheld income tax. These new rules are effective for tax year 2010 through tax year 2012, the period covered by the legislation. 18
Promoting Employment and Savings Child Tax Credit Child and Dependent Care Expense Tax Credit 19
Child Tax Credit Details Supports certain individuals who worked and have dependent children Credit allowed for up to $1,000 per child under age 17 at the end of the tax year Can help to reduce the tax liability Taxpayer must be able to claim the child as a dependent Credit is gradually reduced based on income levels If the credit exceeds taxes owed, taxpayers can receive some or all of the balance as a refund, known as the additional child tax credit (ACTC) or refundable CTC. The ACTC is limited to 15 percent of earnings above a threshold that is indexed to inflation; the threshold is temporarily reduced to $3,000 in 2011. 20
Tax Credit for Child Care and Dependent Care Expenses Individuals who pay for day care expenses for their children or disabled adult dependent so they may work are eligible for a tax credit for up to 35% of the cost of day care (percentage allowed is based on adjusted gross income). To Qualify: Must have a dependent child under age 13 or dependent of any age who cannot care for himself or herself Must have earned income (or could be a student who is an adult) Care must enable worker to be employed or look for employment Care must be provided by a qualifying daycare provider (SSN or EIN of provider is required) Total Expenses for credit are capped at $3,000 for qualifying individual or $6,000 for two or more qualifying individuals. 21
Why are Credits for Taxpayers with Dependents Important? Many beneficiaries struggle with the cost of paying for the care Of raising children (or caring for a dependent) and working. The purpose of the Child Tax Credit is to lower the tax burden of families who are raising children under the age of 17, whether they are working or not working. The purpose of the Child and Dependent Care Credit is to allow the taxpayer (or their spouse, if married) to be gainfully employed. Offers relief to working people who must pay someone to care for their children or other dependents. Available when someone cares for the worker s dependent child (under age 13), disabled spouse, or disabled dependent so that the individual or spouse (if married) may work, or look for work. 22
Important Deductions/Credits of Interest to People with Disabilities Impairment-Related Work Expense Deductions Medical Expense Deductions Credit for the Elderly and the Disabled 23
Impairment Related Work Expense Deductions IRWE is tax deductable, even if it helps reduce the countable Income for Title II or SSI Deduction is allowed for expenses that enable individuals with disabilities to work These deductions are not subject to the 7.5% limit that applies to medical expenses deductions Include the ordinary and necessary business expenses that are: Necessary for individual to work satisfactorily, For goods and services not required or used, other than incidentally, in your personal activities, and Not specifically covered under other income tax laws. Similar to SSA regulations, the individual must be working to use this deduction. 24
Medical Expense Deductions Includes medical and dental expenses the individual pays for self, spouse, and dependents (not covered by insurance). Also includes the cost of insurance premiums that are paid with after tax dollars (paid out of pocket, such as health, dental or vision insurance). Examples include the cost of diagnosis, cure, mitigation, treatment, or prevention of disease and the costs for treatments affecting any part or function of the body. Also include costs of equipment, supplies, diagnostic devices, and transportation for needed medical care and payments for medical insurance. Individuals can deduct only the amount of medical and dental expenses that is more than 7.5% of adjusted gross income This deduction may be important to individuals who have high Medical costs that are not covered by Medicare, Medicaid or other health Insurance. 25
Medical Expense Deductions Include: Medical and Dental Expenses Artificial limbs, contact lenses, eyeglasses, and hearing aids. The part of the cost of Braille books and magazines that is more than the price of regular printed editions. Cost and repair of special telephone equipment for hearing-impaired persons. Cost and maintenance of a wheelchair or a three-wheel motor vehicle Cost and care of a guide dog or other animal aiding a person with a physical disability. Costs for a school that furnishes special education if a principal reason for using the school is its resources for relieving a mental or physical disability. Premiums for qualified long-term care insurance, up to certain amounts. Improvements to a home if the main purpose is medical care. (constructing entrance or exit ramps). 26
Credit for the Elderly and the Disabled Helps reduce the amount of tax an individual may owe To Qualify: Must be 65 or older at the end of 2011, Or under 65 at the end of 2011, and retired on permanent or total disability. Received taxable disability income (for 2011). Are able to claim the credit on Form 1040 or 1040A. For individuals with disabilities under age 65 Must be permanently and totally disabled or stopped working because of the disability Generally requires a physician s statement to keep on file for record Cannot engage in Substantial Gainful Activity (SGA) because of physical or mental condition that is expected to last for 12 months or result in death and documented by a qualified physician 27
Credit for the Elderly and the Disabled: SGA Defined by IRS Substantial gainful activity is the performance of significant duties over a reasonable period of time while working for pay or profit, or in work generally done for pay or profit. Full-time work (or part-time work done at employer's convenience) in a competitive work situation for at least the minimum wage conclusively shows that ability to engage in substantial gainful activity. Substantial gainful activity is not work done to take care of oneself at home. It is not unpaid work on hobbies, institutional therapy or training, school attendance, clubs, social programs, and similar activities. However, doing this kind of work may show that an individual is able to engage in substantial gainful activity. The fact that an individual has not worked for some time is not, of itself, conclusive evidence that he/she cannot engage in substantial gainful activity. 28
Why are Disability-Related Deductions and Credits Important? IRWE Deductions: As with IRWE for SSA benefits, this deduction helps to recoup the cost of these out-of- pocket expenses related to work Medical Expense Deductions: If medical expenses are high, (must exceed 7.5% of adjusted gross income) will help to alleviate the burden of covering these costs Tax Credit for the Elderly or the Disabled Helps reduce the amount of taxes owed for individuals receiving employer disability benefits 29
Promoting Participation in Education through Tax Credits or Tuition and Fees Deductions 30
Credits and Deductions for Education and Vocational Training Two types of Tax Credits: The American Opportunity Tax Credit (targets the first four years of post-secondary education) Lifetime learning Credit (promotes education even if only taking one course) Other deductions may be taken for qualified education expenses depending on adjusted gross income (if not using the credits mentioned above) 31
Education Tax Credits American Opportunity Tax Credit American Opportunity Tax Credit (formerly known as the Hope credit) Credit is worth up to $2,500 per year and is available to each student in the household who is in the first four years of undergraduate education (provided the student is attending at least half-time). To qualify for American Opportunity Credit, an individuals adjusted gross income must be below $80,000 if (single filer) and below $160,000 (joint) Partial credit is available for single filers with a adjusted gross between $80,000 and $90,000 and joint filers with a adjusted gross income between $160,000 and $180,000 can claim a partial credit. 32
American Opportunity Tax Credit The credit can be up to $2,500 per eligible student. It is available for the first four years of postsecondary education. 40% of the credit is refundable, which means that individual may be able to receive up to $1,000, even if no taxes are owed. The student must be pursuing an undergraduate degree or other recognized educational credential. The student must be enrolled at least half time for at least one academic period. Qualified expenses include tuition and fees, coursed related books supplies and equipment. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is less than $80,000 or $160,000 for married couples filing a joint return. 33
Education Tax Credits Lifetime Learning Credit The Lifetime Learning credit is worth a maximum of $2,000 per year per tax return (per family) and equals 20% of the first $10,000 of tuition and related expenses paid during the year, for a maximum credit of $2,000 per tax return. Students who are attending college or graduate school (even less than half-time) taking continuing education courses, or pursuing courses connected to hobbies and other interests may be eligible for this credit. The student does not need to be pursuing a degree or other recognized education credential to receive this credit. Qualified expenses include tuition and fees, course related books, supplies and equipment. 34
Lifetime Learning Credit It is available for all years of postsecondary education and for courses to acquire or improve job skills. The maximum credit is limited to the amount of tax a filer must pay on the tax return. To qualify for the full Lifetime Learning credit, the adjusted gross income must be below $51,000 (for single filers) and $102,000 if for joint filers (2011 thresholds). Single filers with a adjusted gross income between $51,000 and $61,000 and joint filers with a adjusted gross income between $102,000 and $122,000 can claim a partial credit. 35
Education Tax Credits To qualify for either credit, the individual must pay postsecondary tuition and fees for self, spouse or dependent. The credit may be claimed by either the parent or the student, but not both. If the student was claimed as a dependent, the student cannot file for the credit. Only one of the credits (AOTC or LLC) may be claimed in a single tax year. However, if a filer pays college expenses for two or more students in the same year, they can choose to take credits on a per-student, per-year basis. Example: The parent can choose to claim the American Opportunity Credit for a sophomore daughter attending college and the Lifetime Learning Credit for their own vocational training course tuition. 36
Other Deductions for Education If an individual does not qualify for these education credits, they may qualify for the tuition and fees deduction, which can reduce the amount of income subject to tax by up to $4,000. However, and individual cannot claim the tuition and fees tax deduction in the same year the American Opportunity Tax Credit or the Lifetime Learning Credit is claimed. Encourage the individual to take either the credit or the deduction and consult with tax preparation assistance or the IRS to determine which is most beneficial. For more information about these tax benefits, see IRS Publication 970, Tax Benefits for Education available at www.irs.gov 37
Why are Education Tax Credits Important? Increasing post-secondary education provides more employment opportunities and higher income (either through higher education or vocational training). Studies show that individuals who participate in post secondary education had improvement in quality of life through better access to healthcare, more economic stability, greater job satisfaction, less dependency on government assistance. 38
Tax Credit Promoting Savings Retirement Savings Contribution Credit (Saver s Credit) 39
Retirement Savings Contribution Credit (Saver s Credit) Is available in addition to any other tax credits that apply for the individual. To be eligible for the credit an individual must be at least 18 years of age, cannot have been a full-time student during the calendar year and cannot be claimed as a dependent on another person s return. Income limits Adjusted Gross income is not more than: $56,500 if filing status is married filing jointly (for 2011); $57,500 for 2012, $42,375 if filing status is head of household (for 2011); $43,125 for 2012, $28,250 if filing status is single, married filing separately, or qualifying widow(er) (for 2011); $28,750 for 2012. 40
Qualifying Retirement Savings Eligible contributions include: Contributions to a traditional or Roth IRA, Elective deferrals (including after-tax Roth contributions, if available) to a: 401(k) plan (including a SIMPLE 401(k) and the federal Thrift Savings Plan), Savings Incentives Match Plan for Employees IRA plan Simplified Employee Pension Plan IRA 403 (b) annuity governmental 457(b) plan Contributions to a 501(c)(18) plan, and Voluntary after-tax employee contributions to a qualified retirement plan or 403(b) annuity. For purposes of the credit, employee contributions will be voluntary as long as they aren t required as a condition of employment. 41
Amount of Saver s Credit Available The amount of the credit available is based on the contributions an individual makes and his or her credit rate. This can be as 10% or as high as 50%. Credit rate depends on the individual s income and filing status (married, single, head of household). Example: Ruby and her husband Sam both have disabilities. In 2011, Ruby worked at a retail store and earned $30,000. Sam was unemployed in 2011 and did not have any earnings. Throughout the year, Ruby contributed $1,000 to her IRA in 2011. After deducting her IRA contribution, the adjusted gross income shown on her joint return is $29,000. Ruby may claim a 50% credit ($500) for her $1,000 IRA contribution. 42
Saver s Credit Other Provisions Individuals must generally subtract retirement plan distributions from the contributions made. This rule applies to distributions received in the two years before the year the credit is claimed, the year the credit is claimed, and the period after the end of the credit year but before the due date - including extensions - for filing the return for the credit year. The Retirement Savings Contributions Credit is in addition to other tax benefits received for retirement contributions. For example, most workers at these income levels may deduct all or part of their contributions to a traditional IRA. Contributions to a regular 401(k) plan are not subject to income tax until withdrawn from the plan. 43
Why is the Saver s Credit Important? The Retirement Savings Contributions Credit or Savers Credit is to help low income and moderate income workers save for retirement. This is a tool to encourage building retirement savings and is a key to financial stability in the future for working beneficiaries. 44
Imagine the Possibilities! When individuals qualify for the various credits or deductions, the result is increased income. Many of the tax credits can be used simultaneously, thereby increasing the amount of the refund due. This refund can be used to increase savings and financial stability. Example: Mary is a divorced Title II beneficiary, receives Medicare and Medicaid, and has a dependent child age 3. She works part-time as a Certified Nursing Assistant with gross earnings of $1020 per month and worked the entire year. She has used her TWP and recently entered the EPE. She has Impairment-Related Work Expenses approved by SSA to bring her countable earnings just below SGA. She wants to be self-sufficient and is pursuing an Licensed Practical Nurse degree with the support of Vocational Rehabilitation. 45
Imagine the Possibilities! At tax time: Mary can file for the Earned Income Tax Credit (because she is working and low income) She can claim the Child Tax Credit for her dependent child (who lives with her all year), She can file for the Child and Dependent Care Credit (because she must pay for day care so she can work) She can claim Impairment-Related Work Expense (IRWE) Deductions She can choose one of the Education Tax Credits for which she qualifies (American Opportunity Tax Credit or the Lifetime Learning Credit) By contributing savings in an IRA, she can claim the Saver s Tax Credit All of these strategies increase her income and ability to save more money! 46
Helpful Reference Materials to Share with Beneficiaries The tax credits and deductions in this presentation are specific to working people with disabilities and are only a few of the many deductions or credits a taxpayer may use. There are additional credits and deductions for homeowners, deductions and adjustments for income and more. The IRS website provides publications and guidance on various tax topics www.irs.gov A useful link to important tax topics for people with disabilities is Publication 907 http://www.irs.gov/publications/p907/ix01.html Publication 3966 Living and Working with Disabilities is a helpful resource to educate people you support http://www.irs.gov/pub/irspdf/p3966.pdf IRS Disability-related products and publications can be found at: http://www.irs.gov/formspubs/article/0,,id=237193,00.html 47
Tax Assistance, Services and Supports for Beneficiaries 48
Free Tax Help Taxpayers who qualify for EITC have several free options for preparing their returns and Claiming their EITC and other credits., including: More than 12,000 free income tax preparation sites nationwide. (Volunteer Income Tax Assistance or VITA) Any of the approximately 400 IRS Taxpayer Assistance Centers nationwide. Free File through www.irs.gov for internet-enabled do-ityourselfers. 49
Volunteer Income Tax Assistance (VITA) Sites VITA sites have IRS trained and certified volunteers sponsored by various organizations Generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing. Help low- to moderate-income (generally, $49,000 and below) people who cannot prepare their own tax returns. Nationwide Free Tax Preparation Site List can be found at: http://www.irs.gov/individuals/article/0,,id=219171,00.html Or use the IRS VITA site locator number at 1-800-906-9887 50
Free Tax Services Publication 910, IRS Guide to Free Tax Services provides a guide to IRS services, resources, education and assistance programs. The publication also has an index of over 100 TeleTax topics (recorded tax information) to listen to on the telephone. The majority of the information is available free of charge. Accessible versions of IRS published products are available on request in a variety of alternative formats for people with disabilities. 51
IRS Services for Individuals Needing Assistance Taxpayer Advocate Service Offers free help to guide individuals process of resolving tax problems. Taxpayer Advocate Service can help to resolve problems with the IRS if: The individual s problem is causing financial difficulties for them or their business, The individual or business is facing immediate threat of adverse action, Individual has attempted to contact the IRS without timely response. TAS services are located in every state, the DC and Puerto Rico. Services are free Toll free number 1-877-777-4778 or TTY/TDD 1-800-829-4059. For more information, visit www.taxpayeradvocate.irs.gov 52
IRS Services for Individuals Needing Assistance Low Income Taxpayer Clinics The Low Income Taxpayer Clinics (LITCs) serve individuals who have a problem with the Internal Revenue Service and whose income is below a certain level. LITCs are independent from the IRS. Most LITCs can provide representation before the IRS or in court on audits, tax collection disputes, and other issues for free or for a small fee. Low Income Taxpayer Clinics receive partial funding from the IRS via the LITC grant program. Examples of LITCs are nonprofit organizations that represent taxpayers or refer them to qualified representatives, and clinical programs at accredited law, business, or accounting schools in which students represent low income taxpayers who are having a problem with the IRS. Each clinic determines if prospective clients meet the income poverty guidelines and other criteria before it agrees to represent a client. 53
Low Income Taxpayer Clinics (LITCs) LITCs are located in every state. To find LITCs in your state, go to: http://www.irs.gov/ad vocate/content/0,,id=1 51026,00.html and click on your state for locations and listings of services. 54
Warnings for Low Income Taxpayers Beware of RALs, RACs and Cash Advances Nationally, more than two out of three EITC recipients go to a commercial preparer at tax time. On average, it costs them about $100 to have a basic return prepared and filed. Refund anticipation schemes are marketed to low income taxpayers, individuals who are unbanked and recipients of EITC. Refund Anticipation Loans (RALs) Loan of the refund to taxpayer until refund arrives (at high cost to taxpayer) Last year, a typical rapid refund cost $120 in fees the equivalent of a 250% annual interest rate! Will be diminishing after April 2012 due to a settlement with the FDIC Refund Anticipation Checks (RACs) Still in existence, allows taxpayer to pay for tax services out of refund through a loan. While the refund arrives in about 2 weeks the fees for the loan during the refund waiting period equate to an APR of about 414% 55
Warnings for Low Income Taxpayers Beware of RALs, RACs and Cash Advances Payday Lenders and Cash Advances Offer tax season cash advances with high interest These loans are often pushed more frequently to lower income people and is a form of predatory lending! Warn beneficiaries of using these services. Advise individuals to seek help through VITA sites or other free services offered by the IRS. As an alternative, with the option of using e-file and direct deposit. E-filers can receive a refund in about two weeks or the same amount of time it would take to receive the refund with a RAL. 56
What is a Work Incentives Counselor s Role with the EITC and other Tax Credits? Inform beneficiaries about the EITC or CTC or other credits available Help beneficiaries assess whether they might be eligible. WARNING: Work Incentives Counselors are not trained to be accountants! Provide only general information. Be prepared to refer to an appropriate professional when specific questions arise! Help beneficiaries understand how receipt of EITC does or does not impact benefits. Refer them to volunteer or paid tax professionals for assistance in requesting the EITC and other credits and deductions. Remind beneficiaries to report receipt of the EITC to relevant agencies. Encourage beneficiaries to participate in programs offered by financial stability partners (such as IDA programs, or financial education). 57
A Valuable Resource for Organizations: Center for Budget and Policy Priorities The Center for Budget and Policy Priorities provides a variety of tools and resources to help organizations get the word out about EITC and other tax credits http://www.cbpp.org/cms/index.cfm?fa=view&id=2505 Other resources include: Helpful articles National Earned Income Tax Credit Outreach Campaign tools and materials in 21 different languages http://eitcoutreach.org/category/outreach-tools There are a number of resources and fact sheets available to promote filing for taxes, using VITA sites, and understanding the various credits 58
Resources Volunteer Income Tax Assistance (VITA) program http://www.eitc.irs.gov/central/main/ IRS Publication 596: Earned Income Tax Credit http://www.irs.gov/pub/irs-pdf/p596.pdf Use the EITC Assistant to estimate eligibility and estimated amount of credit: http://www.irs.gov/individuals/article/0,,id=130102,00.html IRS Publication 907: Tax Highlights for People with Disabilities http://www.irs.gov/pub/irs-pdf/p907.pdf 7 Tax Tips http://www.irs.gov/newsroom/article/0,,id=204070,00.ht ml 59
Resources IRS Publication 3966: Living and Working With Disabilities http://www.irs.gov/pub/irs-pdf/p3966.pdf IRS Publication 972: Child Tax Credit http://www.irs.gov/pub/irs-pdf/p972.pdf IRS Publication 503: Child and Dependent Care Expenses http://www.irs.gov/pub/irs-pdf/p503.pdf IRS Publication 970: Tax Benefits for Education IRS Publication 590: Retirement Savings Contribution Credit http://www.irs.gov/pub/irs-pdf/p590.pdf IRS Publication 524: Credit for the Elderly or the Disabled http://www.irs.gov/formspubs/article/0,,id=245567,00.html 60