Earned Income Tax Credit

New Coalition brings $15 million

to Philadelphia Working Families

PHILADELPHIA, May 12, 2004 – Hundreds of local volunteers boosted the paychecks of thousands of low-income workers this tax season, bringing $15 million in tax credits to Philadelphia families.  

The Campaign for Working Families is a partnership that promotes free filing of the federal Earned Income Tax Credit (EITC) and connects Philadelphia residents to other tax credits, public benefits and asset-building resources. The Campaign operated 19 free tax preparation sites from January to April 15, 2004, in neighborhoods throughout Philadelphia.

EITC is a tax benefit for working people who earn low and moderate incomes (less than $35,000 a year). It reduces the tax burden on these workers, supplements their wages, and helps families pay bills or save for the future.   EITC refunds can be up to $4,200 per year, based on family size and income.

The tax returns were prepared by 460 Campaign volunteers, all certified by the IRS.   Volunteer recruitment was coordinated by United Way of Southeastern Pennsylvania.

The results:

• $15 million went to low and moderate income working families in Philadelphia. This amount includes the Earned Income Tax Credit (EITC), child tax credit, dependent care credit, education credit and state forgiveness refund. One hundred percent of the refunds went directly to the tax filers. Last year, the Campaign's first year of operation, it brought in $10 million.

• Tax returns were filed for more than 10,000 individuals at the Campaign's 19 free tax-filing sites; more than 92 percent of the returns were filed electronically.

• Volunteer tax preparers filed for the EITC for 3,643 individuals and brought $6 million in EITC to tax filers, a 54% increase in EITC dollars over last year. The average EITC was $1,452.

• The preparation of tax returns by 460 Campaign volunteers resulted in a savings of $2 million for low-wage families, who did not have to pay commercial tax preparers' fees, charges and interest to claim their own money.

• Citizens, PNC and Wachovia Banks adopted tax filing sites, opening 278 new bank accounts for tax filers, enabling them to direct deposit their tax credits. They also provided information to filers about banking services and credit repair.

• The Campaign received 17,730 calls through its 24-hour Interactive Voice Response (IVR) telephone information line. The phone line provided information to callers about EITC eligibility and tax filing sites.   Its website received 3,600 hits.

• Each grant dollar to the Campaign generated $19 directly to families.

"Wow, we topped last year's strong results by bringing $15 million dollars to Philadelphia families.   Add to this the $2 million these same families saved by e-filing at our sites for free, and not paying excessive fees, charges and interest to predatory tax preparers," exclaimed Jean Hunt, executive director of The Campaign for Working Families.

"When a family gets to use their entire EITC check for their own purposes, they can help advance their future.   They can make a down payment on a home, help pay for college, support their children's education or save for the future.   The result is a stronger community and a stronger Philadelphia," Hunt continued.  

Philadelphia is one of 23 cities nationwide to sponsor a campaign to alert families to the EITC and the availability of free tax preparation services.   A newcomer to the EITC movement – this is only the Campaign's second year of operation - Philadelphia is now recognized as the strongest start up program of its kind in the country.

The EITC is also viewed - by unscrupulous financial service providers - as an opportunity to make easy money and high profits, with low risk.

The Brookings Institution reports that, in Philadelphia, more than 41 percent of EITC filers used commercial tax preparers to obtain "Refund Anticipation Loans (RALs)." The loans provide filers with an advance on their anticipated tax refund, but only about 8 to 10 days sooner than they would receive these funds via direct deposit from the IRS to a personal bank account. The interest paid on these loans can annualize to as high as 800 percent.

In Philadelphia, in 2001, 69,554 taxpayers sought a RAL.   If you assume an average interest fee on a RAL of $100, this represents a conservative total estimate of $6.9 million lost to these families.  

The Campaign for Working Families' goal is to increase the number of Philadelphia residents who file for the EITC. A related goal is to increase the number of people who receive free tax filing assistance and do not have to pay exorbitant fees to tax preparation firms.

The Campaign for Working Families is managed by the Greater Philadelphia Urban Affairs Coalition (GPUAC).   It works with a partnership that includes:   Ceiba, the Consumer Credit Counseling Service of Delaware Valley, the City of Philadelphia and the Mayor's Office of Consumer Affairs, The Free Library, the Internal Revenue Service, GPUAC, PathWays PA, Philadelphia Citizens for Children and Youth, Philadelphia County Assistance Office, Philadelphia Council AFL-CIO, The Reinvestment Fund, Transitional Work Corporation and the United Way of Southeastern Pennsylvania.

Support for The Campaign for Working Families' operations and activities comes from: The Pew Charitable Trusts, Annie E. Casey Foundation, the Pennsylvania Department of Public Welfare, John S. and James L. Knight Foundation, the Philadelphia Office of Housing and Community Development, The Philadelphia Foundation, The Samuel S. Fels Fund, VISTA/Corporation for National Service, Fleet Credit Card Services, and Citizens Bank of Pennsylvania, with additional support from the City of Philadelphia's Departments of License & Inspection and Public Property, and Verizon.

Media partners are: the Philadelphia Daily News, 6abc, Univision 65 and Clear Channel.

Pictured here are site managers and site liaisons for the Campaign. Front row, left to right: Kanta Ahujar, Rupa Ragbirsingh, Juanita Rivers, Dakasha Rivers, Lena Smalls, and Jackie Patterson; middle row, left to right: Minerva Ortiz, Janet Weldon, Khadijah Jones, Cheryl Selby, Arlene Harper, Harriet Smith, Ernestina Lejarza and Jennifer Kutz; back row, left to right: Norma Smith, Rebecca Reynolds, Rochelle Gayman, Reubon Joyner, Joseph Overton, Selina Coleman, Desmond Hudson, and Brian Parkinson. Photo by Third Eye Productions.

Click to view additional Third Eye Productions pictures from The Campaign for Working Families End of Tax Season Party.

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For more information about the Campaign for Working Families click here.

For more information about the National Tax Assistance for Working Families Campaign go to www.eitc.com.