Julie is a single mother of three young children. She works full time for a non-profit and, on top of that, is attending classes to pursue a degree in accounting. She makes around $33,000 a year, and after paying for rent, utilities, child care, transportation, health care, and books for school, there’s usually nothing left. For her family, the earned income tax credit has been a blessing.
For the past few years this tax credit has provided a lump sum amount that has allowed her to purchase a reliable vehicle to get to work and school, pay for her youngest daughter to go to preschool, as well as pay down outstanding medical bills resulting from her daughter’s illness. This year she is expects to receive a $2,279 tax return, thanks to the earned income tax credit and plans to put a portion into savings accounts for each of her children to help teach them the value of saving.
Julie’s story is not uncommon. Many households throughout the country struggle to make ends meet. Tax credits such as the earned income tax credit allow people, like Julie, to not only help provide for her family, but to work towards lifting her family out of poverty. Since it was enacted with overwhelming bipartisan support in 1975, and expanded three times during the 1990s, the earned income tax credit has become one of the largest anti-poverty tools in the United States.
Nationally the earned income tax credit redistributed over $63 billion to eligible taxpayers last year, of which $941 million came back to Washington State, with each recipient getting back an average of $2,335. In Whatcom County over $23.5 million was distributed back to tax payers as a result of the earned income tax credit , a significant amount considering 24.1 percent of Bellingham residents are living below the poverty line. This money not only aids individual families but also the community as a whole as it is spent and invested back into our community.
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Despite the fact that the earned income tax credit has been around for almost 40 years, many eligible taxpayers still do not claim it. There are a wide variety of reasons for this. Often workers do not file taxes because they work seasonally or their annual income is below the income threshold requiring them to file. What some people do not realize is even if you’re not required to file taxes by the IRS, you might still be eligible to receive the earned income tax credit , but you must file in order to get this tax credit. This could result in extra money to help pay bills, build assets, open a savings account, or make needed purchases like a reliable car, books for school, or security deposit on an apartment.
The easiest way to ensure that you claim your earned income tax credit , or any other tax credit, is to get your taxes done. Free help is available at any of 10 Whatcom County free tax preparation sites. The Whatcom Asset Building Coalition promotes free tax preparation through AARP Foundation Tax Aide and VITA sites. These sites are staffed with IRS-certified volunteers who are knowledgeable, accurate, and won’t try to sell you any high-cost products. Their focus is to help you keep as much of your hard-earned dollars in your pockets. For a list of times and locations please contact the Whatcom Asset Building Coalition at WhatcomABC.org/taxes or call our tax hotline today at 360-746-0321.