As a fitting follow-up to Martin Luther King Jr.'s birthday commemoration, the Children's Defense Fund is initiating a campaign to alleviate an income tax-filing issue that has plagued millions of low-income American workers each year, including tens of thousands here in our nation's capital. Low- to moderate-income D.C. working families lost $2.6 million of their earned refunds during the 2004 tax season in exchange for collecting those refunds about 10 days sooner in some instances.
As tax season approaches, many of the country's working poor are unaware that they are eligible for the Earned Income Tax Credit (EITC), a refundable federal tax credit for people who work full- or part-time but earn low wages. The EITC, which can be worth up to $4,400, enables workers to use their refunds to cover such expenses as rent, utilities, food and childcare, thereby improving their families' lives while directly reducing poverty levels. Knowing about the EITC for low-income workers, some unscrupulous tax preparers target these individuals, offering them "rapid refunds" through Refund Anticipation Loans (RALs), deceptive high-interest loans that typically carry exorbitant preparation fees and are secured by the taxpayers' refund... Read more from this post.
