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Wednesday, February 5, 2014

EITC Awareness Day: Montgomery County’s Local EITC

"Improvements to both the minimum wage and the EITC are necessary to reduce poverty and expand opportunity for low-wage workers and their families." "Together, the minimum wage and the EITC more effectively support work and reduce poverty than either policy does alone."
-National Women's Law Center

The Earned Income Tax Credit is one of the most effective anti-poverty programs in the nation according to the Center for Budget and Policy Priorities. It reduces the taxes that our lowest income workers pay, allowing these workers to keep more of their income. It particularly helps women and children with families, as these groups are disproportionately affected by poverty. President Obama, during the State of the Union, called to strengthen the EITC at the federal level.

Montgomery County is one of only a few local governments in the country that has its own Earned Income Tax Credit (EITC), which we call our Working Families Income Supplement. Last year, I sponsored Bill 8-13, Working Families Income Supplement, which restores by law Montgomery County's 100% match to the state's EITC over 3 years. Traditionally, Montgomery County matched the State of Maryland's EITC, to ensure that our low-income residents could deal with our high cost of living. In other words, if a taxpayer received $500 from the Maryland EITC, she would receive $500 from Montgomery County as well. However, during the Great Recession, the County Council cut the county's EITC by about a third. After working to restore it gradually through the budget process, I authored and passed a bill to fully restore the EITC as a matter of law.

Citizens for Tax Justice released an analysis of the Montgomery County EITC, which it calls an "exemplary" policy, and notes the following benefits of the EITC.

EITC facts from the Citizens for Tax Justice
  1. It increases work participation. So many jobs hover at the poverty line and those who work in them can easily fall into dependency on other government benefits. The EITC helps them stay on the job, helping achieve the goal of "making work pay."
  2. It improves infant health. Families that have more resources have healthier children, and in Montgomery County we care about getting our children off to the best start in order to help them achieve their potential. For infants, health problems can compound over time. The EITC helps address this need.
  3. It boosts school achievement. Montgomery County is committed to helping young people achieve regardless of their circumstances. The responsibility to help every child succeed is not just born by our great school system, but the county government has important responsibilities to improve the conditions at home. The EITC is proven to boost educational outcomes and close the achievement gap.
  4. It is proven to reduce poverty. The EITC just puts food on the table. Funds that come from the EITC may keep a family from falling into the tragic spiral that can happen when a car payment is missed or a rent payment is missed.
With outcomes such as improved infant health and increased work participation, I feel that the EITC/WFIS is generally spent wisely by those receiving this tax credit. WFIS recipients make far below $89,000, which is what a family needs for "self sufficiency" in Montgomery County. Bill 8-13 targets families living at or below the poverty line in our community by using the Federal ETIC formula. To qualify for the EITC in Tax Year 2013, a taxpayer must earn less than:
  • $46,227 ($51,567 married filing jointly) with three or more qualifying children
  • $43,038 ($48.378 married filing jointly) with two qualifying children
  • $37,870 ($43,210 married filing jointly) with one qualifying child
  • $14,340 ($19,680 married filing jointly) with no qualifying children
My EITC bill passed the Montgomery County Council unanimously on Oct. 29, 2013, but my work on the EITC and anti-poverty programs does not end there. It is important to share with our most vulnerable neighbors that the EITC and other tax credits exist to help them. After all, taxpayers must claim the tax refund in order to benefit from it. About 20% of eligible taxpayers do not claim it nationally, presumably because they are not aware.



For EITC Awareness Day, the National Community Tax Coalition asked me to speak on Capitol Hill. I was joined by fellow Montgomery County residents Camille Henry, former EITC recipient and current EITC advocate, as well as Pam Luckett from Montgomery County Community Action Agency Board. Panelists spoke on how the EITC expands opportunity for women, how it is a vital support for women and children, and the free tax programs available to low income households.



The spectrum of event sponsors is a testament to the broad based effectiveness of the EITC. Sponsors were Center on Budget and Policy Priorities, the National Women's Law Center, the Community Action Partnership, the National Immigration Law Center, the National Disability Institute, Wider Opportunity for Women, RESULTS, CLASP, Doorways to Dreams, Goodwill, Half in Ten, the United Way, the National Council of La Raza, the Coalition on Human Needs and Tax Credits for Working Families.

With these well researched benefits and a formula that targets our friends and neighbors in the greatest need, I know that our County will be better off.

Please check out information on free income tax assistance(below) sent to me by Montgomery County's Community Action Agency.

VITA: Free Income Tax Assistance (Tax Year 2013)

The Volunteer Income Tax Assistance Program (VITA) is for families earning less than $52,000 a year.

Tax Counseling for the Elderly (TCE) offers free tax help and free electronic filing for people 60+. There are sites and partnerships are throughout Montgomery County, now through April 15.

Trained, IRS-certified volunteers help customers access any available credits they may be eligible for, such as the Earned Income Tax Credit, Child Tax Credit, and Credit for the Elderly or the Disabled, etc.

Community VITA & TCE Sites:
  • Community Action Agency VITA Partnership (CAA), by APPOINTMENT ONLY: appointments may be made online for sites in Gaithersburg (Family Services Inc.), Wheaton (Regional Services Center), Rockville (City of Rockville), Takoma Park (TESS) and College Park (U of MD) at www.montgomerycountymd.gov/freetaxhelp and may be cancelled or re-scheduled online (see attached flyers). Or call 240-777.1123 (main) or 240.314.8310 (City of Rockville). Appointments for back year and amended returns: June- October only.
  • RSVP/AARP TCE/VITA Program: provides tax assistance for simple returns, with special attention to seniors and VITA eligible taxpayers, with 20+ locations throughout the County. By APPOINTMENT ONLY: 240.777.2577. More info, including sites: www.montgomeryserves.org/tax-aide/
  • Wheaton Library's VITA, WALK IN ONLY: 11701 Georgia Avenue, Feb. 6 - April, hours: 3:30 - 8:30 PM. No service on March 20th.
  • Community Tax Aid VITA, WALK-IN ONLY: Feb. 1 - April 13. Park Montgomery Apts. Community Center, 8860 Piney Branch Road, Silver Spring, 20903. Sundays: 1 PM - 4 PM. CTA - Rockville Library, 21 Maryland Avenue, 20850. Saturdays, noon - 3 PM. Additional sites in the Metro area: www.communitytaxaiddc.org/ 202.547.7773. Note Income limits: $35,000 for individuals; $52,000 for families.
  • Chinese Culture and Community Service Center VITA, 9366 Gaither Road, Gaithersburg, 20877. For more info, call: 301.820.7200.
  • Ana G. Mendez University VITA, by APPOINTMENT ONLY: 11006 Veirs Mill Road, L-1, Silver Spring, 20901. Wednesdays, 6 PM - 9 PM, Saturdays, 1 - 5 PM. Call: 202.486.2214.
  • Military VITA: provides free preparation to military members and their families through the Armed Forces Tax Council (AFTC). VITA military certified preparers address issues such as combat-zone tax benefits. Community Action and Wheaton Library VITA have military certified VITA preparers. http://legalassistance.law.af.mil/content/locator.php
Free Filing Software/IRS Questions: The IRS' Free File www.freefile.irs.gov provides free federal tax prep and e-file for taxpayers (income $58,000 or below (AGI), through brand-name software, or for higher incomes, online fillable forms. For toll-free tax assistance line at 1.800.829.1040 for individual tax questions or 1.800.829.4933 for business tax questions. Maryland: https://interactive.marylandtaxes.com/Individuals/iFile_ChooseForm/default.asp

IRS local offices NO LONGER prepares taxes, but accepts documents for ITINS (Individual Tax ID Number). See IRS website, or IRS Taxpayer Assistance Office: 11510 Georgia Ave. Wheaton, MD 240.613.8976. VITA/TCE sites can prepare taxes for people who already have ITINs; CAA has a certified acceptance agent who may review documents for "new" ITIN filers while people are having taxes prepared.

Where's My Refund? Check with the IRS within 24 hours after you've e-filed or 4 weeks after filing a paper return. http://www.irs.gov/uac/IRS-Statement-on-Where's-My-Refund-Tool 800.829.1040

Sign Language Interpretation: CAA provides interpretation with advance notice, or contact Gallaudet University VITA in DC: 202.250.2375.

What to bring:
  • Government Issued Photo identification of the tax filer(s)
  • Social Security cards or ITIN for everyone in your family
  • Birth dates for every person claimed on your tax return
  • ALL W-2, 1098, 1099 and/or other documents to report income for ALL jobs worked in 2013
  • Statement of annual child care expenses in 2013 from the provider, with provider's name, address, and their tax ID number (Employer ID/Social Security #)
  • Copy of last year's tax return (if you filed)
  • For Direct Deposit: proof of Bank Account, with routing numbers. Or, ask about Bank On! www.gaithersburgmd.gov/bankon
  • If filing jointly, both spouses must be present

Resources

EITC Outreach and Estimator:
http://eitcoutreach.org/home/outreach-tools/the-eic-estimator/

Multilingual Outreach Flyers:
http://eitcoutreach.org/home/outreach-tools/materials/download-the-eic-flyer-in-21-languages/

Maryland Taxpayer's Bill of Rights & Consumer Guide:
http://taxes.marylandtaxes.com/Resource_Library/Taxpayer_Assistance/Taxpayer_Rights/taxpayer-bill-of-rights.pdf

Self Employed Tools:
http://mdcash.org/self-employed-taxpayer-resources/

ACA (Affordable Care Act) and Premium Tax Credits:
www.IRS.gov/aca For coverage options, and financial help in Maryland: http://marylandhealthconnection.gov/ or call 1.855.642.8572

More Montgomery free tax info:
www3.montgomerycountymd.gov/311/‎ or call "311" – 240.777.0311 TTY 301.251.4850 MD RELAY "711."

More Maryland Free Tax Sites:
www.mdcash.org/free-tax-preparation/ MD residents outside Montgomery: Call "211" MD RELAY "711".