The Earned Income Tax Credit

Jean Hunt, Mayor Michael Nutter and Sharmain Matlock-Turner proclaim January 31st, 2008 EITC day

EITC is a tax benefit for families and individuals who earn, in 2009, less than $45,295 (have children) or less than $18,440 (no children). EITC refunds can be up to $5,657 per year, based on family size and income. Check out the Free Tax Preparation section for more details about eligibility.

For more than 30 years, the EITC has reduced the annual tax burden for low-income working families and emerged as America's largest and most effective anti-poverty program. In Philadelphia, an estimated 39,000 eligible households do not file EITC claims, leaving approximately $66.3 million in unclaimed credits.

For info sheets about EITC in 21 languages, click here.

Looking for information and resources about EITC or tax preparation in Spanish? Check out Recursos En Español.

EITC and Refund Anticipation Loans

A 2005 IRS report shows that 40% of EITC filers in Philadelphia obtained a Refund Anticipation Loan (RAL). 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. According to the National Consumer Law Center Inc. and the Consumer Federation of America, nearly 9 million people took out RALs in 2006, costing them $900 million in loan fees, plus over $90 million in other fees.

Because of the hard work of The Campaign and other organizations operating free tax sites across the country, the number of Refund Anticipation Loans (RAL's) has declined in recent years.