Moving forward to solutions
In 2002, the Earned Income Tax Credit in King County accounted for almost 99 million dollars in refunds put back into the pockets of low-income working families.11 Claiming the Earned Income Tax Credit should be a simple process: low-income workers fill out an additional schedule when filing their federal income tax returns. However, many people do not realize they are eligible, they do not know how to file for it themselves, or they do not have access to reliable free tax services and fail to claim the credit. As a result, IRS data indicates that there is a national 20 to 30 percent rate of underutilization of tax credits.
The IRS estimates that the percentage of eligible filers who do not claim the EITC may be as high as 30% in several King County communities. In addition, in some areas of King County over 40% of EITC dollars are received through RALs. This dilution of the benefit derived from the EITC reduces the spending power of individual families and has a significant negative impact on the King County economy.
Poverty is multifaceted and multigenerational and untangling its web requires a range of strategies large and small, immediate and long term. Reducing the high transactional cost of being poor by providing low cost or free financial services is one important strategy that can pay immediate dividends and provide a path to longer-term financial stability. With your help we can continue to help low income families access low cost financial services.
11 For 2003 (filing 2002 tax year returns) in total: $98,983,065, averaging $1,449 per EITC household.
We estimate that customers saved $339,825 in tax preparation fees alone
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Rainier Beach Rainier Beach Community Technology Center
Seattle Weed & Seed is partnering with the Rainier Beach Community Center and the EITC Campaign to increase the number of tax customers filling at the site and improve the quality of service offered. They were recently awarded a $10,000 technology grant and are hard at work developing volunteer recruitment and outreach plans.
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269
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$403,201
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$1,499
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$180,397
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$1,640
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110
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41%
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$114,938
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$20,037
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"One mother of 4, under 25 years old, was very polite in greeting and getting started, though somewhat reticent and quiet. When she discovered that she would receive almost $4,000 in EITC and other returns, she started yelling and jumping for joy--her income was only $18,000 and she was clearly struggling to make ends meet" ~EITC VOLUNTEER
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