The federal Earned Income Tax Credit (EITC) is credited with bringing more children out of poverty each year than any other federal program. The EITC not only reduces the tax burden on low-income workers, but it also supplements wages, and assists people in making the crucial transition from welfare to work. Created by Congress in 1975, the federal Earned Income Tax Credit, or EITC, provides a lump-sum cash refund to low-wage working individuals and families.
The EITC is the largest federal income subsidy program targeting the working poor. Through the EITC, in 2003, the IRS administered over $36 billion in tax refunds to low-wage workers. These refunds are re-invested into local communities as workers use the funds to make ends meet, invest in home ownership, education, small business, or other important assets that can change their lives. What distinguishes the EITC from other federal income support programs is that eligibility is based on a pre-requisite of employment, making work pay for workers in entry-level positions.
The EITC is a unique example of how the tax system can be used to provide an incentive to the working poor. The use of tax incentives for work and homeownership is nothing new for middle and upper income tax payers who enjoy tax breaks derived from 401K programs, IRAs, mortgages, home equity loans and business deductions to name a few. The EITC has never been as powerful as it is today, as thousands of former welfare recipients are now employed in low-wage jobs and approximately one-third of all workers fall under the umbrella of the working poor. Although the EITC provides major financial benefits to the working poor, the fact remains that as many as 18 - 25% of eligible taxpayers do not claim the credit.
The EITC is the largest federal income subsidy program targeting the working poor. Through the EITC, in 2003, the IRS administered over $36 billion in tax refunds to low-wage workers. These refunds are re-invested into local communities as workers use the funds to make ends meet, invest in home ownership, education, small business, or other important assets that can change their lives. What distinguishes the EITC from other federal income support programs is that eligibility is based on a pre-requisite of employment, making work pay for workers in entry-level positions.
The EITC is a unique example of how the tax system can be used to provide an incentive to the working poor. The use of tax incentives for work and homeownership is nothing new for middle and upper income tax payers who enjoy tax breaks derived from 401K programs, IRAs, mortgages, home equity loans and business deductions to name a few. The EITC has never been as powerful as it is today, as thousands of former welfare recipients are now employed in low-wage jobs and approximately one-third of all workers fall under the umbrella of the working poor. Although the EITC provides major financial benefits to the working poor, the fact remains that as many as 18 - 25% of eligible taxpayers do not claim the credit.
Free Tax Preparation
As part of the Delaware EITC Campaign, First State will offer free tax preparation for eligible households with incomes at or below $50,000 for those with dependents and $25,000 for those without. There are 3 sites located in Sussex County and 1 in Kent County. Each site will be staffed by trained, friendly volunteer tax preparers that will help you claim the Earned Income Tax Credit, Child Tax Credit, and other credits and deductions. Each site is managed by a tax professional to answer volunteer questions, ensure quality, and manage overall site operations.
What you need to bring with you:
W-2s and 1099s from your employer
Social Security Cards (for yourself, spouse, children and other dependents)
Copy of last years tax return
List of other income / expenses (if itemizing deductions)
Childcare information (providers ID number & receipts for amount paid)
Blank check or savings account information for direct deposit
1099s for interest, dividends, unemployment, government and miscellaneous income
1098s for student loan interest, mortgage interest, or property tax
! Please Note: We do NOT do taxes for individuals or families that make over $50,000 with dependents, $25,000 without dependents, or business returns for corporations.
EVERYONE, even returning customers ARE REQUIRED to bring social security cards for everyone in the household - this is a new requirement!
W-2s and 1099s from your employer
Social Security Cards (for yourself, spouse, children and other dependents)
Copy of last years tax return
List of other income / expenses (if itemizing deductions)
Childcare information (providers ID number & receipts for amount paid)
Blank check or savings account information for direct deposit
1099s for interest, dividends, unemployment, government and miscellaneous income
1098s for student loan interest, mortgage interest, or property tax
! Please Note: We do NOT do taxes for individuals or families that make over $50,000 with dependents, $25,000 without dependents, or business returns for corporations.
EVERYONE, even returning customers ARE REQUIRED to bring social security cards for everyone in the household - this is a new requirement!
Federal and State returns are completed for taxpayers with dependents whose household income does not exceed $50,000 annually, and for taxpayers without dependents whose household income does not exceed $25,000 annually. These returns are electronically filed so refunds can be received in as little as 10 days. Since the Campaign started six years ago, over 2,500 volunteers have assisted more than 66,000 hard-working Delaware residents, resulting in almost $950 million in refunds. During the tax season, the IRS audited the tax sites three times to check for quality and each time the grade was A+. The Campaign sites are not only free so taxpayers can keep ALL of their refund, they receive a quality service and with electronic filing they receive their money fast - FREE, RIGHT & FAST - a winning combination! In addition taxpayers have exposure to financial services and asset building avenues available to them.
