The Forgotten Stimulus: United Way invests $125,000 to increase awareness and expand access to the Earned Income Tax Credit

BOSTON - As part of a larger strategy to help families hit hard by the recession move from crisis to financial stability, United Way of Massachusetts Bay and Merrimack Valley announced today that is investing $125,000 to raise public awareness about changes to the earned income tax credit (EITC), which could result in more money for working families this tax season. Created in 1975, EITC is a federal income tax credit for low to moderate income individuals and families.  United Way is encouraging individuals who have not previously been eligible for EITC but may have experienced a job loss or a change in salary this year, to look into their eligibility.

 Families who earned less than $48,279 in 2009 may be eligible to receive more than $5,000 of their earnings back through EITC. This is up from last year's salary cap of $41,646. Changes brought about my the American Recovery and Reinvestment Act have also broadened eligibility and increased the credit amount for families living with three children.  Through its $125,000 investment, United Way is funding outreach efforts and free tax filing sites in Boston, Chelsea, Lawrence, Lynn and Quincy, five communities that have been hit hard by the recession. 

 "The Earned Income Tax Credit is one of the largest economic triggers working in the Commonwealth today," said Michael K. Durkin, president of United Way of Massachusetts Bay & Merrimack Valley. "The tax credit returned to hard-working families through EITC is money that can be used to pay bills, climb out of debt, or save for the future. It is also money that greatly contributes to the local economy."

 The IRS estimates that last year, $10 to 15 million in Earned Income Tax Credits went unclaimed in Boston alone due largely to residents being unaware of the credit or their eligibility. In Lawrence, an estimated $5.2 million in earned income tax credits were left unclaimed. Lynn left an estimated $3.2 million, Quincy an estimated $1.4 million and Chelsea an estimated $1.3 million.

 Last year, United Way invested $78,000 in agencies within four target communities: Boston, Chelsea, Lawrence, and Quincy. In these communities, the effort:

• Filed 2205 federal returns totaling over $3.3 million in refunds.
• Helped eligible individuals and families access $1.16 million in earned income tax credits.
• Provided free tax services so individual and families could access millions in tax refunds and save another $330,000 in filing fees

 In Lawrence alone, whose population has a 58% eligibility rate, the refunds and EITC United Way was able to return back to working families at its funded sites last year increased by 50%. The effort leveraged 101 trained volunteers, who contributed a combined 2,484 hours of their personal time to this effort.  

 Through its Family Financial Stability Fund, United Way also aims to bridge the gap between crisis and stability by helping families transition from emergency basic needs to skills development, education, career advancement, and asset building opportunities.  

 United Way partners with the IRS, Bank of America, Walmart Foundation and other community leaders across the region to ensure that Massachusetts residents have the information and resources they need to access their full earned income tax credit.   To learn about free tax filing services and other financial credits available, residents can call 2-1-1, a free local hotline or visit the online resource guide at www.mass211.org/smartchoices.html.

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