What exactly does EITC stand for, you ask? We won’t lie, it is a hefty acronym… there’s so many letters involved that sometimes, at cocktail parties, even we’re tempted to just say we work for Google or something.
EITC stands for the Earned Income Tax Credit. It is a refundable tax credit, which means that if you make less than a certain amount, the IRS will essentially supplement your income up to a certain level. (And you thought the IRS was only out to get you!) This credit is really aimed at making employment work for American families – especially those with children. In 2009, families with two qualifying children could get up to $4,824. (For the ways that the American Recovery and Reinvestment Act expands the EITC in 2010, check out this IRS news bit . It’s gone way up!)
We don’t know how to put this, but because the EITC targets low-to-moderate income families even more effectively than minimum wage legislation, it’s kind of a big deal. (Yes. We did just make a Ron Burgundy joke.) No, seriously: in 2006, approximately 22 million taxpayers received more than $43 billion dollars from the earned income tax credit. And, because economists believe that every dollar received by low income families has a multiplier effect upon the local economy, that’s really like… well, way more money for American neighborhoods. Just check out the Federal Reserve Bank’s stats on what the EITC is doing for Nashville.
As such, the EITC is the single largest poverty reduction tool we have in the US. The problem? Many people who qualify don’t claim it! 20 to 25%, actually. Many of these simply don’t know about it, because they aren’t filing at all (many people who qualify for the EITC are below the mandatory filing threshold). That’s billions of dollars lost to America’s working families, every year, for no good reason!
Before we became fabulous enough to have our own blog, the Coalition started out as a Campaign, really. And the campaign was centered on closing this gap, and making sure that everyone who qualified for the EITC received it. And even though we’ve branched out into all sort of wonderful (and free) financial services — credit advising, financial coaching, youth training, health insurance enrollment, etc. — making sure that hardworking Boston residents get the EITC money they deserve is still nearest and dearest to our hearts.
