By Dustin Tyler Joyce
January 22, 2007

This year, millions of dollars in the Earned Income Tax Credit (EITC) will go unclaimed by needy families across the country. That’s the message of the Mayors’ National Dollar Wi$e Campaign as the tax season kicks into high gear.

At September’s Dollar Wi$e Advisory Board meeting in Santa Barbara, Conference of Mayors Vice President Miami Mayor Manny Diaz – a recent Dollar Wi$e Capacity Grant recipient city – asked Dollar Wi$e to focus some of its efforts on promoting the EITC. “The EITC can help put money into the pockets of our working poor,” said Diaz. “By developing local campaigns, cities can use proven outreach methods to reach even more citizens who have not yet taken advantage of this important tool in the fight against poverty.”

In response, Dollar Wi$e has made the following resources available to mayors:

• A new “EITC Resources” page on its Web site at www.dollarwiseonline.org, with information and links on the EITC, VITA, and IRS outreach.

• A new Dollar Wi$e Best Practices: Earned Income Tax Credit publication, profiling the EITC outreach efforts of Dollar Wi$e cities from Savannah to San Francisco.

• The 2007 Earned Income Tax Credit and Child Tax Credit Outreach Kit, published by the Center on Budget and Policy Priorities.

Dollar Wi$e has joined the National EITC Outreach Partnership, a broad coalition of organizations across the nation working to increase awareness of this initiative.

The EITC is one of the federal government’s largest anti-poverty initiatives. It reduces or eliminates the taxes owed by America’s lowest-income families. As a refundable tax credit, if the credit exceeds the amount of taxes owed it results in a refund to the taxpayer. Since its introduction in 1975, it has distributed billions of dollars and lifted millions of American families out of poverty.

Many states, the District of Columbia, and some cities each have their own income tax credits that supplement the EITC. However, to claim the credit individuals must file an income tax return, even if their earnings were not high enough to require it. For this reason, many Dollar Wi$e cities run Volunteer Income Tax Assistance (VITA) sites to help their residents prepare and file tax returns and claim the EITC.