Published: June 14, 2015This past tax season, thousands of Orange County families enjoyed unexpectedly higher refunds, thanks in large part to tax credits they never knew existed.This is due to the work of the OC Free Tax Coalition, a local partnership of tax professionals and financial institutions helping to ensure that qualified low- and middle-income families in Orange County receive the federal Earned Income Tax Credit.
Part of the IRS’s Volunteer Income Tax Assistance program, this local coalition convened more than 400 volunteer IRS-certified tax experts at more than 60 Orange County locations to advise eligible individuals and families about the EITC. They also provided tax preparation and filing services at no charge.
As one can imagine, these savings add up for families earning less than $60,000 per year, freeing up vital budget resources to pay medical bills, eliminate car payments or purchase school supplies for their children.
Orange County United Way is honored to lead the OC Free Tax Prep Coalition, an important element in our FACE 2024 community-wide action plan to address the education, income, health, and housing needs of local residents within the next decade.
The EITC is credited for lifting more children out of poverty than any other public program. This is critical as California’s effective poverty rate is 23.4 percent, the highest in all 50 states, according to the Supplemental Poverty Measure for 2013 reported by the US Census Bureau. Here in Orange County, one in four of our neighbors is financially unstable.
Our goal is to reduce this level by 25 percent by 2024.
Knowledge about financial education resources is key to achieving this goal. The more informed families are about resources like the EITC, effective banking strategies, debt reduction, savings and tax management practices, the more likely they are to chart out sound financial futures.
This year alone, these programs helped save more than $3.1 million in tax preparation fees and secured over $13.7 million in federal tax refunds. These are dollars that stay right here in Orange County to be invested into our local economy. As a matter of fact, a study by the Brookings Institution found that $1.58 in local economic activity is generated by each additional EITC dollar received.
Now there’s a chance that California families may enjoy even more tax savings in the coming years.
Gov. Jerry Brown has included a California version of the EITC in his 2015-16 budget proposal. If passed intact, the program would allow for a family with three or more dependents earning up to $13,870 and individuals earning up to $6,580 to qualify. In addition to the governor’s proposal, Assembly Bill 43, introduced by Assemblyman Mark Stone, would also establish a refundable California EITC for working low-income families.
We at United Way support efforts like the governor’s EITC proposal and AB43 to expand opportunities for working Orange County families to become financially stable and independent. What’s more, an EITC would address the lack of income gains for hardworking Californians while simultaneously providing a much-needed economic stimulus in our most economically distressed communities.
Financial stability. It’s one of the core building blocks of a quality life, and why United Way is so passionate about the EITC and other proven financial assistance programs that help people help themselves and support their families.
To learn more about the EITC, VITA and other ways United Way is ensuring that residents have access to a full range of financial empowerment services, visit www.unitedwayoc.org/income.
Max Gardner is CEO of the Orange County United Way.