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Tax time is end of January for
low-income
working families:
The
Campaign for Working Families promotes
filing
for the Earned Income Tax Credit and
opens
its Free Tax Services
PHILADELPHIA,
January 21, 2005- The end of January is tax time for low-income
working families, who now have an alternative to costly commercial
tax preparers and Refund Anticipation Loans. The launch of
this tax season's citywide campaign to promote the federal Earned
Income Tax Credit (EITC), and the availability of free tax filing
sites in neighborhoods throughout Philadelphia, was announced today
by The Campaign for Working Families. The event was held at the
location of one of the Campaign's 20 free tax sites, Community College
of Philadelphia, West Regional Center.
Speaking at the event were Campaign partners and an EITC recipient,
Rhondarette Wright, a single mother of three who told the story
of how she was ripped off last tax season by one of the nation's
largest tax preparers, who offered her an "instant loan" to receive
her own money in 1-2 days. The loan turned out to be a Refund Anticipation
Loan (RAL) that took 10 days to arrive, at a cost of $279 (total
fees paid, including the RAL). This tax season, Wright plans
to file her taxes at one of the Campaign's new mobile tax sites,
operated in partnership with the Philadelphia AFL-CIO. "This
year I am going to be able to keep all my money," she said.
"It's my money, I worked for it, I should be able to keep it all."
Wright explained
that she used last year's EITC of $3,868 to pay off bills.
"I will use my new EITC to pay bills and for my first family vacation,
a trip to Chicago for a family reunion," she cheerfully reported.
EITC is a tax benefit for working people who earn less than $35,500
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 $4,300 per year, based on family size
and income. Currently, about 45,000 eligible households in
Philadelphia do not file EITC claims, leaving approximately $76.5
million in unclaimed credits.
The Campaign for Working Families is a partnership that promotes
free filing of the federal Earned Income Tax Credit (EITC)/PA TAX
BACK, and connects Philadelphia residents to other tax credits,
public benefits, and ways to keep and grow their household incomes.
Similar EITC campaigns are underway in more than 30 cities across
the nation.
Jean Hunt,
executive director, Campaign for Working Families, reported that
over the past two years, the Campaign has brought more than $25
million directly into the homes of low-income working families.
"This is money that went to 19,000 hard working families and money
that strengthens our local economy," she said.
The Brookings Institution reports that in Philadelphia more than
41 percent of those who do file for EITC use commercial tax preparers
to obtain Refund Anticipation Loans (RALs). The interest
paid on these loans can be as high as 700 percent – to provide
cash only a few days before refunds would have arrived (and sometimes
no sooner). The National Consumer Law Center estimates that consumers
paid $1.4 billion in 2003 for RALs.
The locations of the
Campaign's free tax preparation sites and information on EITC
eligibility is available on the website or by calling the Campaign's
24-hour information line at 215-686-2599. The Campaign's
20 free tax filing sites opened in neighborhoods throughout Philadelphia
the week of January 18.
The Campaign for Working Families' is a partnership of 16 major
Philadelphia organizations and is managed by the Greater Philadelphia
Urban Affairs Coalition.
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