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Creating Real Economic Impact for People with Disabilities

Creating Real Economic Impact for People with Disabilities. Earned Income Tax Credit Disability Initiative Campaign. The Arc of the United States National Convention San Diego, CA October 14, 2006. Stakeholders Partnership, Communication and Education (SPEC). Mission Statement:

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Creating Real Economic Impact for People with Disabilities

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  1. Creating Real Economic Impact for People with Disabilities Earned Income Tax Credit Disability Initiative Campaign The Arc of the United States National Convention San Diego, CA October 14, 2006

  2. Stakeholders Partnership, Communication and Education (SPEC) Mission Statement: “To assist taxpayers in satisfying their tax responsibilities by building and maintaining partnerships with key stakeholders, seeking to create and share value by informing, educating, and communicating with our shared customers.”

  3. What is SPEC? • SPEC is the Outreach and Education Function Of Internal Revenue Service’s Wage and Investment Division. • SPEC’s Approach is to Combine Resources and Goals With Other Organizations for Better Access to Lower Income Populations In Local Communities.

  4. SPEC Key Customers • Low to Moderate Income • Elderly (over 60 years of age) • Limited English Proficient • Disabled

  5. Earned Income Tax Credit • The EITC is the largest federal aid program benefiting working families: • Over $40 Billion to 21 Million Working Families and Individuals • EITC is approximately equal to Temporary Assistance for Needy Families (TANF) and Food Stamp Programs combined (in total dollars) • Ten times the size of the Community Development Block Grant (CDBG) program

  6. Earned Income Tax Credit • The EITC is the most effective anti-poverty tool for working families • Lifts over 5 million individuals out of poverty each year, including 2.6 million children • Has ability to turn a $7 per hour job into an $9 per hour job • 2006 Tax Year Benefits up to $4,536 for families with 2 children and $412 for individuals with no children

  7. What Does EITC do for Working Families? • 2006 EITC maximum refund amounts: • Up to $4,536 with 2 or more qualifying children • Up to $2,747 with 1 qualifying child • Up to $412 with no qualifying child

  8. Why is EITC Important to Individuals and Families? • Helps Individuals Keep Working and Care for Themselves and Their Children by Allowing Them to: • Pay For Reliable Transportation • Secure Convenient Child Care Options • Cover Medical Expenses • Buy Food and Other Basic Necessities • Keep Current on Rent and Utility Payments

  9. EITC and the Disabled • EITC provides $$$ to the working disabled without negatively affecting other benefits (SSI, etc.) • EITC can be claimed even if no tax return is required to be filed • Children with disabilities qualify with no age restrictions

  10. Earned Income Tax Credit • Now That We Know What EITC Is and Why EITC Is So Important – What Can Be Done to Assist People with Disabilities and Their Families?

  11. Community Based Partnerships Awareness and Education AssetBuilding Community- Based Coalitions Tax Preparation

  12. Why is Tax Education Important for Persons with Disabilities? • Many People with Disabilities are not Aware of EITC • Concerns over Interaction of Disability Benefits and Tax Filing • Missing out on other Tax Benefits and Credits

  13. Why Are Tax Preparation Services Important to Persons with Disabilities? • Complexity of Tax Law • Tax Preparation Fees Erode the Value of Refunds • Must File if They Have Earned Income to Receive Refunds of Credits/Withholding • Opportunity to Link to Asset Building Strategies

  14. Why are Asset Building Opportunities Important to People with Disabilities? • 54% of People with Disabilities have no Savings Accounts and 69% do not have a Checking Account • 33% of Adults with Disabilities Live in Households with Total Income of <$15,000 Compared to Only 12% of those without Disabilities • 58% of People with Disabilities are Asset Poor (Do not have enough resources to live at the Federal Poverty Level for three months) Sources: 2004 N.O.D/Harris Poll & 2000 U.S. Population Census

  15. Volunteer Income Tax Assistance • VITA – Free Tax Preparation • Saves $100 to $300 in tax preparation fees • Quick refunds via direct deposit- avoids costly Refund Anticipation Loans $50 - $100 • No check cashing charges 1%-3%

  16. VITA National Numbers • VITA in 2000 (SPEC First Year): • 1,127,362 free tax preparation • 52% Electronic Filed returns • VITA in 2006: • 2,247,280 free tax preparation • 83% Electronic Filed returns

  17. Economic Impact of the EITC on San Diego County • Tax Year 2004 • 171,649 returns claiming EITC • Received refunds = $ 294,497,713

  18. San Diego Countywide EITC Coalition • 2005 – Return Refunds: • 5,162 Total Returns = $ 7,119,610 • 2,332- EITC Claimed = $ 3,883,965 • Preparation Fees Saved = $ 774,000 • Over $7 Million Brought Back Into the Community Using VITA

  19. TAX FACTS+ Campaign • TAX FACTS+ Campaign (link persons with disabilities and their families to free tax preparation and asset building services) • Expanded to 54 Cities in 2007 • Over 100 cities by 2008

  20. Activities and Outcomes NATIONAL PROGRAM • Increased number of tax filers with disabilities by 330%. • 5,211 tax filers in 2005 • 17,233 tax filers in 2006 • Over 200 disability partners engaged in 2006 • 342,554 outreach contacts made in 2006

  21. Successes • Wichita • Assisted 340 People With Disabilities in 2005 • Prepared 56 Tax Returns for People with Disabilities that had no Filing Requirements • West Palm • Distributed 150,000 Copies Regarding Their Tax Campaign that Included Information about Accessible Sites. • Prepared 559 tax returns for People with Disabilities

  22. What Can Your Organization do to Help? • Provide EITC outreach • Join Existing Coalition Efforts • Become Part of The Disability Workgroup • Educate Clients • Educate Employees • Become a Free Tax Preparation Site

  23. Resources • www.mastermymoney.org (NDI website for TAX FACTS+) • www.irs.gov/pub/irs-pdf/p3966.pdf (IRS Disability Brochure) • www.irs-eitc.info/SPEC (IRS site on EITC) • www.cbpp.org/eic2006 (Center on Budget and Policy Priorities site and Access to EITC Toolkit) • www.tax-coalition.org (National Tax Coalition site) • www.brookings.edu/urban/eitc (Brookings Institution)

  24. If you have questions, need additional information or would like to receive EITC or any other educational materials, please contact: Richard Keeling – Senior Tax Analyst 404-338-8814 Richard.Keeling@irs.gov (e-mail) 401 West Peachtree Street STOP 53WI Atlanta, GA 30308 Contact Information

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