Almost 40,000 out of 209,000 eligible Philadelphians didn’t apply for the Earned Income Tax Credit on their federal income tax returns last year. And with each credit averaging about $2,400 for eligible filers, Philadelphia Department of Revenue Commissioner Frank Breslin is making sure the city is doing what it can to educate residents about the EITC and make it easier for them to apply for the credit on their federal tax return.
Efforts include the rollout of the revenue department’s You’ve Earned It website — www.youearneditphilly.com — which Breslin said was an ideal way to inform residents of the federal refundable tax credit.
“There are 40,000 eligible Philadelphians who have not applied,” Breslin said. “There’s about $100 million out there on the table. People just need to apply for it as part of filing their taxes.”
The EITC is a refundable credit available to low- to moderate-income individuals and families that is worth up to $6,242 per income tax return. More than 150,000 Philadelphians got an EITC refund last year.
To qualify, individuals must have a qualifying child (dependent listed on tax returns), be between the ages of 25 to 65 and have earned less than $53,267 last year.
According to the IRS, there is a tiered income system for both individual and married filers.
For those filing as single, head of household or as widowed, the income tiers are capped at $14,820 with no qualifying children; $39,131 for individuals with one child; $44,454 for filers with two children; and $47,747 for those with three more children.
The scale is similarly tiered for those married coupes filing jointly. That scale is $20,430 for a childless couple; $44,651 for one qualifying child; $49,974 for two children; and $53,267 for married couples with three or more children.
That maximum credits are $6,242 with three or more qualifying children; $5,548 with two qualifying children; $3,359 with one qualifying child; and $503 with no qualifying children.
Married same–sex couples are also eligible.
Breslin said that with such a broad qualifying scope, there is no reason not to apply.
“The first barrier for people is just getting the word out,” Breslin said. “People aren’t aware of the credit, what it is or how to get it. So we are getting the word out, and putting dollars around that effort. This is a way for people to get money back in their pocket. The average refund for Philadelphians is $2,400, but it can go as high as $6,402. That’s serious money.”
Breslin said the credit also goes back four years, so filers can also submit amended returns for prior years to get the credit. He noted the dearth of resources for EITC applicants, including where to go for help and said the You’ve Earned It website also included a listing of locations that provide free tax filing assistance.
“People think filing is time–consuming and expensive, but the department has partnered with nonprofits in establishing 30 free tax-preparation locations throughout the city, many with Spanish-speaking preparers and many near public transportation,” Breslin said. “So once an applicant determines they are eligible, they can go to one of these sites, get taxes done free of charge and claim that credit.”