By Richard Keeling, Senior Tax Analyst in Stakeholder Partnerships, Education and Communication (SPEC) of the Wage & Investment Division, Internal Revenue Service
Many Americans with disabilities may not be aware of the valuable Earned Income Tax Credit (EITC) that can help lift them out of poverty. Enacted in 1975, the EITC is a federal tax credit for people who work, but do not earn high incomes. In 2017, more than 25.8 million eligible workers and families received about $63.8 billion in EITC. But, the IRS estimates that 20 percent of American taxpayers who qualify for the credit do not claim it. Many may not claim the credit simply because they are not aware of it or don’t know how to do so.
It is also critical for people with disabilities to understand how claiming tax credits may affect other public benefits they depend on. It is important to know that, with recent law changes, Federal and State EITC payments are not considered as income for several public benefits, including Medicaid, SSI, SSDI, SNAP or federally-assisted housing programs.
Approximately 20 percent of Americans live with some level of disability, and many of these individuals have first-hand experience with financial hardships. In fact, more than one-third of all adults with disabilities live in households with a total income of $15,000 or less according to a National Organization on Disability/Harris Poll. In addition, 83 percent of people with disabilities said they had never claimed an income tax credit or deduction related to their employment or disability.
Volunteer Income Tax Assistance (VITA) and other free tax preparation services are an integral part of the free tax preparation community coalitions. Community partners recruit and train volunteers who then prepare tax returns free for people who cannot do their own returns and cannot afford a paid preparer. Many are eligible for EITC.
Last year, IRS certified volunteers prepared more than 3.6 million tax returns for low- to moderate-income taxpayers (those making less than $54,000), bringing back $4 billion in refunds, as well as saving approximately $1 billion in fees for tax preparation and pre-refund loans. VITA sites can be found using the VITA Locator and entering your ZIP Code.
For more information on EITC, please visit the “EITC & Other Refundable Credits” website at www.eitc.irs.gov . This site offers up-to-date EITC data. There is also a “Partner Toolkit” where you will find an array of general and specialized marketing tools, including templates, statistics, fact sheets, how-to tips, specialized products and links to other helpful resources. Conducting outreach and sharing clear and accurate information about the availability of the credits and how to claim them is extremely important.
And be sure to join us on Friday, January 26th, for our EITC Awareness Day Thunderclap.
When we reach 100 or more participants on Thunderclap, this message will be sent out on EITC Awareness Day at 1:00 p.m. EST on Twitter, Facebook and TUMBLR:
On #EITCAwarenessDay, help #IRS put money in the pockets of working Americans who are eligible. http://thndr.me/7qYUfl
The more people who sign up, the louder our Thunderclap will be.
Please consider participating and help us spread awareness about this important tax credit.
About the author:
Richard Keeling began his career with the Internal Revenue Service in 1982 and worked several years in the compliance division of the IRS as an auditor, instructor and manager. In 2001, Richard was selected to his current position as a Senior Tax Analyst in Stakeholder Partnerships, Education and Communication (SPEC) of the Wage & Investment Division. His primary responsibility is overseeing the Veterans and Disabilities programs. These programs provide widespread access to tax information and free tax preparation services, as well as asset building strategies to improve their economic well-being. In addition, Richard is involved with the IRS’ Hiring Initiative to recruit, employ and retain Veterans with disabilities and other people with disabilities.