The Earned Income Tax Credit-EITC and the Child Tax Credit-CTC, is offered each year by the IRS to provide employment and income benefits to millions of low and moderate-income families. The intent of the EITC and CTC is to reduce poverty by supplementing the wages of poor workers and encouraging more people to work.
The EITC was designed to benefit working families and families with children. There are valid arguments to change who is eligible to participate. This year the maximum credit for families with one child is $3,400 and the maximum credit for families with three or more is $6,318. The EITC and CTC can move families out of poverty or just above poverty. Research indicates the EITC is credited for the most significant gains in employment among single mothers and female headed households. Single moms are more likely to be eligible for the EITC because they tend to have lower earnings and qualifying children. Some studies also indicate that income from the EITC and CTC tends to improve educational outcomes for young children. For each $1,000 increase in annual income, over two to five years, children’s school performance improves. By boosting employment earnings of working women, the EITC also boost Social Security and retirement benefits, which are based on an individual’s work history. Other than Social Security, the EITC is the most effective program at lifting people out of poverty.
478,000 Illinoisans were lifted out poverty by the EITC and CTC between 2011 and 2013. In 2014, the EITC put about $2.6 billion dollars in the pockets of Illinois families who claimed it on their returns. 1.1 million households in Illinois received the EITC. 791,000 Illinois families received the CTC in 2014.
METEC is a nonprofit organization located on the South Side of Peoria. Their Volunteer Income Tax Assistance-VITA program started in 2011. It provides free tax preparation to help individuals that earn less than $54000.00 keep their hard-earned money in their pocket. The VITA program brings millions of dollars back into the local economy through tax refunds and tax credits. In addition to getting free tax preparation, tax filers receive and have access to free financial products. They’re able to open checking accounts at several financial institutions to have their tax refunds directly deposited into. To date more than 4500 tax returns have been prepared at no cost to the tax filer. The VITA program has prepared over $2.5 million dollars in Earned Income Tax Credits and Child Tax Credit refunds. As with most VITA programs across the country, METEC’s VITA program operates on the time and resources of volunteers. Many have been doing this for years and have built relationships with the people they serve. This year the IRS recognized the dedication and services of the program coordinator of METEC’s VITA program. Elma Mathews has been preparing taxes for 17 years. She was given the Outstanding Public Service award by the IRS. Thanks to Elma, the Volunteers, and METEC for strengthening our communities with their services.