Wilmington City Council and Delaware State Treasurer Kick Off the Annual Earned Income Tax Credit Campaign

Posted on  01/31/2014 1:33 pm

Wilmington City Council President Theopalis Gregory and 4th District Council Member Hanifa Shabazz were joined today by Delaware State Treasurer Chip Flowers, fellow City Council Members and community representatives for a news conference in Wilmington to kick off the 12th annual Earned Income Tax Credit (EITC) Campaign.

The EITC campaign in Delaware is coordinated by the Nehemiah Gateway Community Development Corporation (NGCDC) whose President is Reverend Clifford Johnson, Pastor of Shiloh Baptist Church in Wilmington. The program offers free tax services to citizens through a partnership of the Nehemiah Gateway CDC, First State Community Action Agency and the Delaware Alliance for Community Advancement, with support from financial institutions, foundations, and United Way of Delaware.

The campaign educates citizens about the EITC, prepares taxes for those who qualify and encourages sound financial management and savings. The Earned Income Tax Credit is available to employed individuals and families meeting certain income and other qualifying criteria. For example, the Earned Income Tax Credit benefits families who earn less than $51,567 (with three or more children and filing a joint return) per year. The maximum tax credit that citizens can receive could be as much as $6,044 depending on family size and income.

FREE tax preparation sites are now open to help families assess whether they are entitled to the tax credit, or to assist with the preparation of tax returns and the opening of bank accounts. Complete details about the tax sites and the EITC program are available at www.nehemiahgateway.org

“Wilmington City Council Members are eager to assist with this year’s campaign by urging eligible residents to take advantage of the EITC,” said Council President Gregory. “Each year, more and more people in Wilmington and around the State are claiming a tax credit that is rightfully theirs and are also receiving the added benefit of FREE tax preparation. But, even though the EITC campaign has been in existence for a dozen years, about 20% of eligible Delawareans still do not file for the tax credit. We’ve got to change that and help families generate additional income, especially since it’s so easy to do.”

According to Reverend Johnson, President of NGCDC, the EITC increases the ability of workers in lower paying job categories to support themselves and their families. He said research shows that by helping a person reap additional tax benefits based on the amount they earn has increased the labor force participation of lower skilled workers, especially single mothers.

Reverend Johnson said during the 35-year history of the EITC, more children have been lifted out of poverty through the EITC than any other social program or category of programs. Without the tax credit, he said, the poverty rate among children in the United States would be 25% higher. The EITC has reduced participation in welfare and food stamps, and reduced the housing affordability burden of low income households. In tax year 2012, EITC returned over $155 million dollars of federal money to eligible Delawareans at an average of $2,150 per return. EITC funnels billions of dollars into low income communities, both urban and rural, in the form of consumer spending and asset building.

Reverend Johnson said more than $20 million of 2012 Federal refunds were claimed from returns prepared by NGCDC’s 350 volunteers. This included more than $9 million in EITC credits. Conservatively, the total economic impact of the refunds exceeds $24 million. He said more than one-half of tax filers had 2012 income of $15,400 or less, and two-thirds were females. Over half indicated they were of African-American or Latin heritage. NGCDC had Spanish speaking staff at many tax sites.

For clients who prefer to prepare their own returns, there is now a free software program available at www.MyFreeTaxesDE.com. Delawareans with a household income of $58,000 or less in 2013 are eligible to use this site, which offers free tax filing for state and federal taxes, as well as a free telephone helpline that can be reached by calling Delaware 2-1-1 or 1-855-MY-TX-HELP.

MyFreeTaxesDE is managed by a Delaware Coalition, led by United Way of Delaware, $tand By Me® and Goodwill of Delaware and Delaware County, as well as more than 30 state and local organizations, businesses and schools. $tand By Me® also invites taxpayers to meet with a free financial coach to help with other money-related topics. Any Delawarean can visit www.standbymede.org to make an appointment to meet with their free financial coach to set their own financial goals. 

By having free, readily accessible sites in low income communities throughout Delaware, NGCDC reaches households that might otherwise not be aware of the EITC program. And with the self-prepare program available at www.MyFreeTaxesDE.com there’s also an opportunity to prepare taxes from the comfort of your own home. In addition, with commercial tax preparation fees averaging over $250, clients are able to save that money and take advantage of free tax preparation programs. Clients are also not subjected to sales pressure for instant refunds and loans.

Reverend Johnson said another important value-added service from the NGCDC is the financial literacy and empowerment programs offered at the tax sites. Financial coordinators are available much of the time to assist clients with financial questions, information and referrals. Johnson said thus far, clients have opened 500 new checking and savings accounts, and over 400 referrals have been made for financial coaching, educational classes, credit management and homeowner information and assistance.

Reverend Johnson said none of this would be possible, of course, without the dedication of hundreds of volunteers providing more than $2 million in volunteer time and donations from financial institutions, foundations, and United Way of Delaware.