Earned Income Task Force helps NE Iowa Families boost their incomes

Situation:
The Earned Income Tax Credit (EITC) is a special tax benefit for working people who earn low or moderate incomes. For many reasons, families who qualify for this credit do not apply. Therefore, rural communities and Iowa as a whole lose millions of dollars in revenue that could increase the income of families and boost the state’s economy. Iowa State University Extension has promoted this important credit to families but until 2003 no direct service had been provided to families to help them file their tax returns and claim the EITC.

Response:

• The HAWC Empowerment area (Howard, Allamakee, Winneshiek and Clayton Counties in NE Iowa) applied for and received a grant from the Annie Casey Foundation to train volunteers who would prepare tax returns for low-income families at no charge. One of the main goals of the project was to increase the number of families applying for the tax credit to bring more money to rural Iowa communities.
• Three of the ISUE Certified Financial Counselors, the FRM field specialist serving the four counties and her spouse all received tax preparation training in December, 2003 and January 2004. A site was selected in each of the four counties and dates were published to recruit low-income families.
• The ISUE FRM field specialist and her spouse completed and successfully submitted 36 tax returns that first year.
• At the same time, the Dubuque Area Earned Income Tax Credit Task Force was formed but did not get satellite sites organized for the 2003 tax year.
• The Dubuque Area Task Force has become better organized each year and for the 2004 tax year & 2005 tax year, satellite sites have been established at Loras College, St. Matthews Lutheran Church, The Lifetime Learning Center, and the Diversity Center in the City of Dubuque and the Public Libraries in the communities of Manchester and Maquoketa. The Manchester Site can handle a maximum of 32 clients and those slots are filled before the end of January each year.
• ISUE donated the use of two portable computers and a printer to help the volunteers at the Dubuque Diversity Center this year.

Results:

• In the 2003 tax year, there were 5,095 families in the three county area (Dubuque, Delaware and Jackson) that claimed the EITC for a total of $7,642,844.
• In the 2004 tax year, there were 7,414 families in the three county area that claimed the EITC for a total of $11,398,148.
• In one year’s time, the Task Force increased the number of families claiming the EITC by 2,319 and the economic impact of this increase amounts to more than 3.75 million dollars.
• The average EITC claimed by the families was $1,537.

Contact:
Ellen J. Spurlock
Iowa State University Extension
1417 N. Franklin Street, PO Box 336
Manchester, IA 52057
Phone 563-927-4201
Email ejspurlo@iastate.edu