Resolution on tax credit OKd

Posted: November 21, 2003

City Council yesterday called on state congressional leaders to help increase the number of working families benefiting from the federal Earned Income Tax Credit so they can climb out of poverty.

In a resolution sponsored by Councilwoman Marian B. Tasco and unanimously approved by Council, city officials request that the IRS require employers to include tax-credit information when mailing federal W-2 tax forms to their employees.

The tax credit offsets income taxes and provides refunds to families with two or more children who earn less than $34,692 a year. About 45,000 households in the city did not take advantage of the federal program, Tasco said.

Her measure was proposed with another resolution, which is to be debated later. That resolution asks state leaders to scrutinize refund-anticipation loans. Though such loans are immediate, they are often costly - reducing an expected refund through high annual percentage rates ranging from 97 percent to 800 percent.

"It's an important issue that we protect our citizens in Philadelphia, particularly low-income and middle-income families who think they are getting a quick tax return but in essence are getting a loan," said Tasco, flanked by members of the local chapter of the Campaign for Working Families and the Association of Community Organizations for Reform Now.

Tasco said that poor families were often lured and duped by tax preparers who tout refund-anticipation loans, or "rapid refunds," as a way to quickly get tax refunds.

Contact staff writer Leonard N. Fleming at 215-854-4330 or lfleming@phillynews.com.

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