The Campaign for Working Families

Tax time is end of January for low-income working families: The Campaign for Working Families promotes filing for the Earned Income Tax Credit and opens its Free Tax Services

PHILADELPHIA, PA, January 21, 2005- The end of January is tax time for low-income working families, who now have an alternative to costly commercial tax preparers and Refund Anticipation Loans. The launch of this tax season's citywide campaign to promote the federal Earned Income Tax Credit (EITC), and the availability of free tax filing sites in neighborhoods throughout Philadelphia, was announced today by The Campaign for Working Families. The event was held at the location of one of the Campaign's 20 free tax sites, Community College of Philadelphia, West Regional Center.

Speaking at the event were Campaign partners and an EITC recipient, Rhondarette Wright, a single mother of three who told the story of how she was ripped off last tax season by one of the nation's largest tax preparers, who offered her an "instant loan" to receive her own money in 1-2 days. The loan turned out to be a Refund Anticipation Loan (RAL) that took 10 days to arrive, at a cost of $279 (total fees paid, including the RAL). This tax season, Wright plans to file her taxes at one of the Campaign's new mobile tax sites, operated in partnership with the Philadelphia AFL-CIO. "This year I am going to be able to keep all my money," she said. "It's my money, I worked for it, I should be able to keep it all."

Wright explained that she used last year's EITC of $3,868 to pay off bills. "I will use my new EITC to pay bills and for my first family vacation, a trip to Chicago for a family reunion," she cheerfully reported.

EITC is a tax benefit for working people who earn less than $35,500 a year. It reduces the tax burden on these workers, supplements their wages, and helps families pay bills or save for the future. EITC refunds can be up to $4,300 per year, based on family size and income. Currently, about 45,000 eligible households in Philadelphia do not file EITC claims, leaving approximately $76.5 million in unclaimed credits.

The Campaign for Working Families is a partnership that promotes free filing of the federal Earned Income Tax Credit (EITC)/PA TAX BACK, and connects Philadelphia residents to other tax credits, public benefits, and ways to keep and grow their household incomes. Similar EITC campaigns are underway in more than 30 cities across the nation.

Jean Hunt, executive director, Campaign for Working Families, reported that over the past two years, the Campaign has brought more than $25 million directly into the homes of low-income working families. "This is money that went to 19,000 hard working families and money that strengthens our local economy," she said.

The Brookings Institution reports that in Philadelphia more than 41 percent of those who do file for EITC use commercial tax preparers to obtain Refund Anticipation Loans (RALs). The interest paid on these loans can be as high as 700 percent – to provide cash only a few days before refunds would have arrived (and sometimes no sooner). The National Consumer Law Center estimates that consumers paid $1.4 billion in 2003 for RALs.

The locations of the Campaign's free tax preparation sites and information on EITC eligibility is available on the website or by calling the Campaign's 24-hour information line at 215-686-2599. The Campaign's 20 free tax filing sites opened in neighborhoods throughout Philadelphia the week of January 18.

The Campaign for Working Families' is a partnership of 16 major Philadelphia organizations and is managed by the Greater Philadelphia Urban Affairs Coalition.