Earned Income Tax Credit (EITC) and Volunteer Income Tax Assistance (VITA)

Policy Guide

The Earned Income Tax Credit (EITC) provides a rebate to low-income workers based on a percentage of their income. Unlike most tax credits, the EITC is refundable. If a person chooses to apply the EITC when filing taxes, a rebate is issued if the credit exceeds the taxpayer's liability.

Workers without children may be eligible for an EITC valued up to $438. Workers with children may be eligible for an EITC of up to $4,824, depending on income and the number of children under their care. There are certain requirements that must be met to claim the EITC; those requirements can be found here. In addition to the federal version of the EITC, 24 states and 3 municipalities offer their own versions.

Sponsored by the Internal Revenue Service, the free Volunteer Income Tax Assistance (VITA) program assists low-income workers with filing federal tax returns. The purpose of this program is to help those low-income individuals who may lack the resources or awareness to take advantage of all possible tax benefits, such as the EITC or the Child Tax Credit. VITA provides this help with no-charge preparation assistance from trained volunteers, who are normally deployed between early spring and the April 15th filing deadline.

VITA also helps individuals connect to programs that encourage savings and wealth building, increase financial literacy, and obtain social support services. Depending on the size of the community, there may be several VITA locations or none. To find the nearest VITA location, a taxpayer or organization can call 1-800-829-1040. If there are no local VITA sites, or too few, community development organizations can work to establish new or additional locations. A guide on how to start a VITA site from the State of North Carolina is available here.

Links:

  • CFED (formerly the Corporation for Enterprise Development) has published a policy brief describing how to use the EITC to promote asset building, available here.
  • Community-wealth.org provides an EITC and CTC Outreach Kit, which offers tools for practitioners and is available to download here: 
    www.community-wealth.org/_pdfs/tools/individuals/
    tool-cpbb-eitc-link-saving.pdf (200KB)
  • Official Internal Revenue Service EITC resources are available here with questions and answers available here. The Internal Revenue Service also provides information on VITA here.
  • The National Community Tax Coalition makes available several EITC outreach resources for practitioners are available at: 
    www.tax-coalition.org