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Initiatives
Earned Income Tax Credit Initiative
 Tax season is approaching, and many working individuals are eligible for the Earned Income Tax Credit or EITC. The EITC is a tax federal tax refund for eligible working individuals and households.
You must have earned income to apply for the EITC. Households that qualify for the EITC could receive a tax credit refund of up to $4,700.
What is the EITC?
The EITC is a tax benefit for low to moderate-income working individuals and families. Workers who qualify for the EITC and file an income tax return can receive a refund, even if they had no income tax liability for the given year.
Why is the EITC important? Each year, low-income families substantially increase their annual income by utilizing the EITC. In fact, the EITC lifts more families out of poverty than any other federal aid program, providing families an opportunity to increase savings, reduce debt, and finance education or training programs. The EITC credits that go unclaimed by low-income workers represent millions of dollars of lost revenue that would otherwise boost local economies.
Impact of EITC gains: In 2004, more than 250,000 area taxpayers claimed EITCs, bringing over $450 million back to the community -- an average of $1,700 per taxpayer. The IRS estimates that 20-25 percent of qualifying taxpayers fail to claim the EITC. An increase of just 5 percent, or 12,500 taxpayers, would equal $21.25 million in EITC refunds to metro Detroiters.
Reality of EITC losses: Each year, millions of EITC dollars go unclaimed. In the city of Detroit alone, an estimated $38 million was lost in unclaimed credits in 2004. In addition, many who claim EITCs apply for Refund Anticipation Loans and end up pocketing less than half of the money they earned. These loans have interests rates as high as 74 percent.
Who is eligible?
Families with one child who earn less than $33,241 in 2007 (or less than $35,241 for married workers) are eligible for a credit ofup to $2,853.
Families with two or more children who earn less than $37,783 in 2007 (or less than $39,783 for married workers) are eligible for a credit of up to $4,716.
Workers without a qualifying child who earn less than $12,590 in 2007 (or less than $14,590 for married workers) are eligible for a credit of up to $428.
¿Quién califica para EITC? 
How to claim the EITC
- Complete the Schedule EIC in the Federal 1040 or 1040A.
- FREE: Take advantage of free tax preparation services. Known as Volunteer Income Assistance, or VITA, this program provides IRS-trained volunteers to prepare and file tax returns for free. Click here for a list of free tax preparation sites by county in Michigan.
- FREE: Use the web-based self-preparation service I-CAN! EIC™ available free of charge for EITC eligible tax payers. This service is written at a fifth grade level and offered in credit unions and Michigan Works! Offices. Click on ICAN!EIC for more information
United Way's role
We are focused on financial stability: United Wayis creating lasting community change by focusing on educational preparedness, Financial Stability and basic needs. Through the Earned Income Tax Credit Initiative, UWSEM is addressing Financial Stability by helping taxpayers claim federal rebates.
What we’re doing: We are part of the Southeast Michigan Regional Asset Building Coalition, which is working to create awareness about the EITC and engage volunteers to help prepare taxes for free. The Coalition hopes to recruit more than 200 volunteers to serve at VITA sites and help metro Detroiters claim eligible tax credits. We are also working to build awareness about financial issues such as predatory lending practices, pay day loans, and predatory tax preparation services that further hinder an individual’s ability to save and build assets.
Volunteer Income Tax Assistance (VITA) sites: VITA sites are sanctioned by the IRS and provide free tax preparation services and financial literacy counseling to qualifying individuals. Currently, only 1 percent of EITC tax returns are prepared at free sites.
The EITC Initiative is led by the Southeast Michigan Regional Asset Building Coalition. Partners include:
AARP, Accounting Aid Society, Bank of America, Community Action Agency, Internal Revenue Service, Macomb County Asset Building Coalition, The Tax Credit Initiative Coalition of Oakland and Livingston Counties, United Way for Southeastern Michigan, Washtenaw Asset Building Coalition, and Wayne County Asset Building Coalition
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