United Way’s financial stability work begins with tools and strategies that help families increase and maximize their income in order to meet daily expenses. The Earned Income Tax Credit (EITC) is the most effective federal aid program for low-to moderate income workers. For many eligible families, the EITC can increase their annual income by as much as 15 percent.
What is the “Earned Income Tax Credit?”
The Earned Income Tax Credit (or “EITC” as it’s commonly known) is a tax credit for working people. The EITC rewards low-wage work by reducing the taxes that low-wage workers pay on their earnings and by supplementing their wages. Only people who work are eligible for the EITC, and for workers with very low earnings, the size of the credit increases with each additional dollar of earnings, providing an incentive for more work. Extensive evidence shows that the EITC encourages work: they encourage families to obtain jobs and remain employed.
Millions of children in working families live in poverty, and millions of families with incomes modestly above the poverty line have difficulty affording food, housing, and other necessities. The federal EITC now lifts about 4.4 million people — over half of them children — out of poverty each year; it’s the nation’s most effective antipoverty program for working families.
Benefit to the Local Economy
The Dutchess County Economic Development Corporation confirms that in Orange and Dutchess Counties, every $1 spent makes an impact on the local economy of $1.50.
In the Spring of 2015, 1089 Dutchess and Orange County filers claimed $1,794,092 in Earned Income Tax Credits.
Filers in Regional Survey Reported They Would Use Tax Return Money
• On bills
• On basic needs such as food or clothing for themselves and their family
• On rent or mortgage
• On other expenses, such as car repair, education, childcare
For more on the Earned Income Tax Credit: