Taxes and Poverty

By Carla Cox, Program Director, United Against Poverty

When we first entertained hosting the Volunteer Income Tax Assistance (VITA) program on the United Against Poverty Orlando campus, we knew this would benefit our members, but weren’t quite sure of the impact it would have. Through this program, volunteers become IRS certified tax preparers and assist families with low income navigate the complex process of filing completely for free. As we move into our 3rd year as a VITA location, we continue to learn the benefits this vital program has on the working poor; specifically, those who qualify for the Earned Income Tax Credit (EITC).

The EITC was first introduced on a Federal level in 1975 and served over 27 million families in 2016. Those who qualify for this tax credit are low income families, “70% of which had an adjusted gross income of $25,000 or less” (Simon; 2018). Because you are required to have earned income throughout the year, the EITC serves those living in poverty who are considered the working poor. This is the same population we serve at United Against Poverty.

The EITC is the largest cash assistance program in the US that directly decreases the amount of families living in poverty (Falk, Crandall-Hollick; 2018). Receiving the tax credit has proven to be substantial for families living below 100% of the Federal Poverty Guideline. In 2013, the EITC combined with the Child Tax Credit moved 4.7 million children above the poverty line (Short; 2014).

In 2018, United Against Poverty Orlando and VITA were able to file 125 tax returns with a total combined return of over $84,000 to our members. This year, our volunteer team has grown to 14 and we are expanding to 2-days a week to provide more opportunities to serve our members. We continue to research new, unique ways to serve our members and are excited to see the impact of the Earned Income Tax Credit in 2019.

References:

David Simon, Mark McInerney, and Sarah Goodell; October 4, 2018; Health Affairs; “The Earned Income Tax Credit, Poverty, and Health”; https://www.healthaffairs.org/do/10.1377/hpb20180817.769687/full/

Gene Falk and Margot L. Crandall-Hollick; April 18, 2018; Congressional Research Service; “The Earned Income Tax Credit (EITC): An Overview”; https://fas.org/sgp/crs/misc/R43805.pdf

Kathleen Short; 2014; Current Populations Reports US Census Bureau; “The Research Supplemental Poverty Measure: 2013”; https://poverty.ucdavis.edu/post/research-supplemental-poverty-measure