For the ninth consecutive year, the Sacramento County Department of Human Assistance (DHA), in partnership with the Internal Revenue Service (IRS), has been providing free and confidential tax preparation for low and moderate-income working families, many of whom are entitled to the Earned Income Tax Credit (EITC).

EITC is a refundable tax credit for people who work, but don’t earn high incomes. It is in addition to any tax refund they may already receive. In most cases the EITC does not affect eligibility for benefits like food stamps, cash assistance, Medi-Cal, SSI or subsidized housing. If they qualify, eligible taxpayers could pay less federal tax, no tax or even get a tax refund from the IRS. Approximately 24,000 Sacramento County families are potentially eligible for EITC, yet many of them are not taking advantage of this credit.

Economic trends have made it harder for many families to rise out of poverty despite the presence of one or even two working parents. The prevalence of poverty among California’s working families is striking. According to the California Budget Project, more than two million Californians live in families that are working, but poor, and an additional 1.4 million live in families hovering just above the poverty line. One of the most powerful tools available to boost the incomes of the working poor is the federal EITC. The Public Policy Institute of California, in a report released last year, considers EITC to be one of the largest anti-poverty programs in the United States. It lifts more American children out of poverty each year, than any other government program.

Since the inception of this partnership, more than 450 DHA employees have been trained to electronically file tax returns and help taxpayers apply for the EITC. That translates into more than 21,000 tax returns prepared with total EITC dollar amounts claimed of more than $22.9 million, and total state and federal income tax refunds returned of $29 million.

EITC is a reward for hardworking families who do not earn a lot of money. It does not affect eligibility for public assistance benefits in most cases so families can buy necessary items they otherwise could not afford. It’s money that can go directly back to the families to help them continue to get on their feet economically. Many taxpayers who have used the free service were surprised at the amount of money they were to get back, and considered it a windfall.

For the tax year 2007, those eligible to apply for the credit are a family whose earned income totals less than $39,783 and have two or more qualifying children, $35,241 and have one qualifying child, or less than $14,590 with no children.

Tax preparation services run from now through March 29, 2008 at nine sites located throughout Sacramento County. For more information, please call 916-874-2072 or log on to www.dhaweb.saccounty.net.