WHAT IS THE EARNED INCOME TAX CREDIT?

The Earned Income Tax Credit (EITC) returns federal, state, and, in New York City, local government dollars to qualifying working families and individuals either as cash refunds or a credit on taxes. This income can help people cover basic expenses, such as bills, school supplies, etc.

The NYC EITC Campaign
In 2002, Mayor Michael Bloomberg directed the New York City Department of Consumer Affairs (DCA) to create a citywide coordinated campaign to increase the number of eligible New Yorkers claiming the EITC. In the intervening years, New York City has assembled the most comprehensive Coalition in the country, combining the efforts of more than 150 partners to publicize the credit and to help over 200,000 New Yorkers file their taxes for free-nearly half claiming the EITC. In Tax Year 2004, the credit paid on average approximately $2,500 to workers of modest means citywide, and returned more than $2 billion in tax refunds to New Yorkers who knew to claim the EITC.

Over the past five years, we’ve distributed approximately 11 million pieces of EITC Campaign literature translated in 11 languages to city agencies, post offices, public libraries, and schools; placed advertisements on the subways, in bus shelters, in McDonald's, and in dozens of newspapers, including community and ethnic media outlets, and on several television channels and radio stations.

In the 2008 tax season, DCA's Office of Financial Empowerment continues our efforts as part of Mayor Bloomberg's aggressive efforts to fight poverty in New York City.

Who qualifies?
Following are examples of people who qualify for the EITC.

Bob and Sheila Jones have two children, Lisa (age 8) and Bobby (age 6). The children lived with their parents for all of 2007. Sheila is 28 and earned wages of $11,000. Bob is 35 and earned wages of $15,000. They had no other income. Their total earned income was $26,000. Since they made less than the maximum income limit, met the age requirement and have two children, they qualify for the EITC.

Ron White takes care of his 7-year-old niece. His niece lived with him for all of 2007 and he cared for her as his own child. Ron is 26 years old and his income for the year was $19,000. He qualifies for the EITC.

Tina Smith is age 63 and retired. She received $7,000 in social security benefits during the year and $5,850 from a part-time job. She also received a taxable pension of $4,400. Tina had no other income; she is not married, and has no qualifying children. Since social security does not count as income, her total earnings were $10,250. She meets the requirements for the EITC.

How do we help families claim this credit?
The single greatest reason people do not file for the EITC is that they are unaware of it. The New York City Coalition, which comprises government agencies, labor unions, nonprofits, and businesses, uses education, promotion, and free neighborhood-based tax assistance to broaden awareness about the credit and encourage eligible New Yorkers to file for the money they deserve. The economic benefit to the City as a whole is further enhanced by a multiplier effect of two-to-three times as the influx of money circulates throughout the local economy.