The Campaign for Working Families

Tax Season Ends with 447 volunteers bringing more than $20 million to low-wage Philadelphia families

PHILADELPHIA, May 5, 2006- Hundreds of local volunteers from The Campaign for Working Families boosted the paychecks of thousands of low-wage workers this tax season, bringing $20.5 million in tax refunds and credits to Philadelphia families.

Volunteers from the Campaign brought the millions to 12,522 families who filed income tax returns at one of their 17 free tax sites, located in neighborhoods throughout Philadelphia.

Over the past four tax seasons, the Campaign has brought $65.7 million to low-wage families in Philadelphia.

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. The EITC is a tax benefit for working people who earned less than $37,263 in 2005.

The tax returns were prepared by 447 Campaign volunteers, recruited by United Way of Southeastern Pennsylvania, trained by the Campaign and certified by the IRS. This year’s results:

$20.5 million went to low-income working families in Philadelphia. This amount includes the Earned Income Tax Credit (EITC), child tax credit, dependent care credit, education credit and state tax back refund. One hundred percent of the refunds went directly to the tax filers.

Tax returns were filed for 12,522 individuals at the Campaign’s 17 free tax-filing sites.

With 92 volunteers, Valley Forge-based Vanguard topped the list of Philadelphia area businesses that prepared income tax returns at the Campaign’s free tax filing sites.

The average EITC was $1,698.

The Campaign served low-income families. The median adjusted gross income of Campaign tax filers was $14,777.

“We brought $20.5 million directly to Philadelphia families and saved these same families an additional $4.8 million because they did not have to pay commercial tax preparers excessive fees, charges and interest to claim their own money,” said Jean Hunt, executive director of The Campaign for Working Families.

Hunt’s calculation is based on a recent test conducted by Community Legal Services, a Campaign partner. On February 2, 2006, Judith G. went to H&R Block with her simple tax return. A total of $382 was paid to H&R Block for Judith G. to receive her refund in 4 days, instead of the usual 10 days ($272 in tax prep fees plus an additional $110 for a Refund Anticipation Loan).

“When a family gets to use their entire EITC check for their own purposes, they can begin to build their future. They can make a down payment on a home, help pay for college, improve their credit rating, support their children’s education or save that money,” Hunt continued.

An estimated 39,000 eligible households in Philadelphia do not file EITC claims, leaving approximately $66.3 million in unclaimed credits. And more than 41 percent of EITC filers in Philadelphia use commercial tax preparers to obtain Refund Anticipation Loans (RALs). The annualized interest paid on these loans can be as high as 700 percent – to provide cash only a few days before refunds would have arrived.