Federal tax credits help families, boost economy
This tax season, the Earned Income Tax Credit (EITC) will give Colorado’s economy a boost by putting an expected $700 million back into the pockets of hard-working families with children that earned less than $50,000 in 2012. One of the nation’s most successful anti-poverty programs, the EITC and other work tax incentives promote employment while providing valuable refunds to low- to moderate-wage earners who oftentimes struggle to meet their families’ most basic needs.
But an estimated 50,000 Colorado families miss out on as much as $85 million in EITC refunds each year because they don’t realize they exist. To increase EITC awareness, the Denver-based Piton Foundation is conducting a statewide public education campaign, helping to ensure that the more than 300,000 eligible families – many of whom are in the military or returning veterans – claim the EITC refunds they deserve.
In 2012, the 325,000 Colorado tax payers who claimed the EITC received an average of $2,000 per household, totaling $660 million. According to The Piton Foundation, research shows that lifting a struggling family’s income helps children do better in school, which leads to increased educational attainment and higher earnings in adulthood. In addition, an increased family income results in improved child wellness because healthy habits-such as eating more produce and visiting the dentist-become more affordable.
Because they help stabilize the workforce and encourage full-time employment, the EITC and other work tax credits, such as the Child Tax Credit and Child and Dependent Care Credit, also strengthen business in Colorado. Many families use their EITC refunds to pay for transportation and childcare, making them more reliable employees. Also, small business owners-of which there are 426,000 in Colorado-can file taxes as individuals and claim the EITC to help support their families, educate themselves and keep their businesses alive.
Through the program Tax Help Colorado, The Piton Foundation is partnering with 16 colleges to operate 27 free tax preparation sites across the state during the 2013 tax season. At these locations, people who earn less than $50,000 a year can get their taxes filed for free by trained college students.
The maximum income to qualify for the EITC this year ranges from $13,980 for a single person with no children, to $36,920 for a single parent with one child, and $50,270 for a married couple with three or more children. The credit can be as much as $5,891 for very low-income workers with children. The EITC operates by reducing the amount of taxes owed and increasing the chances of receiving a refund.
The Piton Foundation publicizes the EITC and other work tax credits by distributing more than 1.5 million education materials through partners such as the State of Colorado, city and county governments, schools, churches, and nonprofits, including food banks and health and human services providers. The organization also runs print and television advertising campaigns.
Information on EITC eligibility and a full list of free income tax assistance sites in Colorado can be found by dialing 2-1-1 (it’s a free call), visiting http://www.piton.org/eitc, or finding Tax Help Colorado on Facebook at http://www.facebook.com/taxhelpcolorado
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