Get Rich Quick: File For Eitc The Tax - And Tax Credit - Season Opens

Posted: February 01, 2008

MAYOR NUTTER declared yesterday Earned Income Tax Credit Day. The announcement was his first mayoral proclamation. And it was also the first day of the EITC season.

The economic environment that surrounds this tax season is bleaker than in other recent years. As the economy teeters on the brink of a recession, the Federal Reserve has cut interest rates twice in nine days. And the Senate is mulling an economic-stimulus package that, after it's reconciled with a House version, will send hundreds of dollars in tax-rebate checks to taxpayers.

The bottom line: It's important that money circulate through the economy.

And that's what the EITC does. The EITC is a federal tax benefit that refunds up to $4,716 to eligible low-income individuals and families. The extra money not only helps the struggling families pay bills and save, but eventually finds its way into the local economy, and everyone benefits.

The EITC, around for 30 years, is one of the best programs created to reduce poverty. So it's a little surprising that only this year legislation to create a state EITC, which could give poor Pennsylvanians up to $1,400, has come out of the House.

Ladened with amendments for tax cuts and tax credits, it is now in the Senate Finance Committee.

The Campaign for Working Families, the partnership that coordinates a program that provides free tax-preparation services, says that in the last five years, families have received $86 million in refunds from the federal EITC.

But just as important, people have saved about $14 million during that period in interest, tax-preparation charges, check-cashing and loans. This is important because tricks and traps are rampant as tax-preparation companies try to get their hands on as much of people's money as they can.

Traps like "refund-anticipation loans," and "pay- stub loans" have cost consumers millions with outrageous interest rates. (And it's worth sending out an early warning on those tax rebates that may be coming: We have no doubt companies will be cooking up special ways to get their hands on this money, too. It's always best to wait for the check, and then put it in the bank.)

For more information on the EITC and locations of the Campaign for Working Families free tax-preparation sites, go to www.Phillyfreetaxes.org, or call 215-686-2599. *

comments powered by Disqus
|
|
|
|
|