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  • Most Hispanics don't collect tax credits (USA Today report)

    Most Hispanics don't collect tax credits

    HURON, Calif. (AP) "” A federal program that can boost a low-income family's tax credit by thousands of dollars, is not reaching some of the neediest households "” especially in rural Hispanic communities.

    Only 36% of the eligible Hispanic households surveyed in California's San Joaquin Valley received the Earned Income Tax Credit (EITC) they were entitled to last year "” even though the credit can provide up to $4,000 for households headed by the working poor.

    The disparity was evident in the partial results of the Rural Families Speak Project "” a five-year survey by universities around the country into the financial well-being of rural families.

    When Petra Janzer arrived at a free tax workshop, her 10-year-old car was breaking down, the tires were worn through and she had never heard of the EITC.

    The $1,307 check she got last year paid for new tires and repairs, and the 56-year-old grandmother from Huron could again rely on her car to get her to her job as a child care provider 25 miles away.

    Volunteers helping taxpayers in isolated rural communities say their clients' inability to access agencies that could tell them about the credit, along with language differences and cultural assumptions, often keep Hispanics from receiving the credit.

    The large number of undocumented immigrants in the Hispanic population does not account for this difference, because the credit applies only to legal, working residents, with income less than twice the poverty level and at least one child living at home.

    The Internal Revenue Service, recognizing the need for outreach, has trained 14,000 volunteers in the last three years to fill out the basic tax form and check for EITC eligibility. The effort has paid off. Last year, 20.9 million families got the credit "” up from 16 million the year before.

    Government auditors consider EITC a high-risk program, however, so this year, the IRS is asking some applicants for extra documentation proving they qualify. About 25,000 letters went out in December asking families to prove their children lived with them more than half the year.

    Margarita Rocha, executive director of Centro La Familia, an advocacy organization that gives free tax help, said the letters have intimidated some recipients.

    "The literacy level of our clients sometimes is not high, or they haven't been here that long," said Rocha.

    EITC is often considered the most successful federal anti-poverty program. More eligible families get the EITC than traditional assistance programs like Medicaid or food stamps. In the last tax year, it gave $36.9 billion back to qualifying families.

    Proponents say one of its advantages is the way it rewards only those who work. The amount each eligible taxpayer gets is equal to a percentage of income. If the EITC exceeds the taxpayer's liability, the Internal Revenue Service will refund the difference.

    "These are really their dollars, not a handout," said Karen Varcoe, the University of California-Riverside consumer economics specialist who led the California research published in the January-March issue of California Agriculture magazine.

    For Janzer, the EITC means she has extra money to help care for her granddaughter. Now, it's tax time again and she's back, W-2 in hand, hoping the credit will keep her car rolling for another year.

    Janzer qualified because she makes less than $24,980 a year "” double the $12,490 level that marks the official beginning of poverty for a family of two.

    In the Hispanic households surveyed by Varcoe and others in rural Kern and Madera counties, where unemployment is high and many workers depend on seasonal agricultural jobs, the average family income was $19,920 a year, just under poverty for a family of five. But only a third of the eligible families filed for the EITC.

    "Some even have an idea that they can get money back, but they don't know how, or if they qualify," said Wilfredo Rodriguez, who works at Centro La Familia.

    Knowing who is eligible is not always simple in a community where families often include citizens, undocumented immigrants and people in the process of legalizing their status. Fear of the federal government is also common.

    "The IRS to them is the federales, the people who come after them," Varcoe said. But researchers found a little information about EITC goes a long way. "We're convinced that if people have information they'll act on it," Varcoe said.

    --------------------------------------------------------------------------------
    Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    Find this article at:
    http://www.usatoday.com/money/perfi/...c_x.htm?csp=26
    Sweet Madame Belu

  • #2
    Most Hispanics don't collect tax credits

    HURON, Calif. (AP) "” A federal program that can boost a low-income family's tax credit by thousands of dollars, is not reaching some of the neediest households "” especially in rural Hispanic communities.

    Only 36% of the eligible Hispanic households surveyed in California's San Joaquin Valley received the Earned Income Tax Credit (EITC) they were entitled to last year "” even though the credit can provide up to $4,000 for households headed by the working poor.

    The disparity was evident in the partial results of the Rural Families Speak Project "” a five-year survey by universities around the country into the financial well-being of rural families.

    When Petra Janzer arrived at a free tax workshop, her 10-year-old car was breaking down, the tires were worn through and she had never heard of the EITC.

    The $1,307 check she got last year paid for new tires and repairs, and the 56-year-old grandmother from Huron could again rely on her car to get her to her job as a child care provider 25 miles away.

    Volunteers helping taxpayers in isolated rural communities say their clients' inability to access agencies that could tell them about the credit, along with language differences and cultural assumptions, often keep Hispanics from receiving the credit.

    The large number of undocumented immigrants in the Hispanic population does not account for this difference, because the credit applies only to legal, working residents, with income less than twice the poverty level and at least one child living at home.

    The Internal Revenue Service, recognizing the need for outreach, has trained 14,000 volunteers in the last three years to fill out the basic tax form and check for EITC eligibility. The effort has paid off. Last year, 20.9 million families got the credit "” up from 16 million the year before.

    Government auditors consider EITC a high-risk program, however, so this year, the IRS is asking some applicants for extra documentation proving they qualify. About 25,000 letters went out in December asking families to prove their children lived with them more than half the year.

    Margarita Rocha, executive director of Centro La Familia, an advocacy organization that gives free tax help, said the letters have intimidated some recipients.

    "The literacy level of our clients sometimes is not high, or they haven't been here that long," said Rocha.

    EITC is often considered the most successful federal anti-poverty program. More eligible families get the EITC than traditional assistance programs like Medicaid or food stamps. In the last tax year, it gave $36.9 billion back to qualifying families.

    Proponents say one of its advantages is the way it rewards only those who work. The amount each eligible taxpayer gets is equal to a percentage of income. If the EITC exceeds the taxpayer's liability, the Internal Revenue Service will refund the difference.

    "These are really their dollars, not a handout," said Karen Varcoe, the University of California-Riverside consumer economics specialist who led the California research published in the January-March issue of California Agriculture magazine.

    For Janzer, the EITC means she has extra money to help care for her granddaughter. Now, it's tax time again and she's back, W-2 in hand, hoping the credit will keep her car rolling for another year.

    Janzer qualified because she makes less than $24,980 a year "” double the $12,490 level that marks the official beginning of poverty for a family of two.

    In the Hispanic households surveyed by Varcoe and others in rural Kern and Madera counties, where unemployment is high and many workers depend on seasonal agricultural jobs, the average family income was $19,920 a year, just under poverty for a family of five. But only a third of the eligible families filed for the EITC.

    "Some even have an idea that they can get money back, but they don't know how, or if they qualify," said Wilfredo Rodriguez, who works at Centro La Familia.

    Knowing who is eligible is not always simple in a community where families often include citizens, undocumented immigrants and people in the process of legalizing their status. Fear of the federal government is also common.

    "The IRS to them is the federales, the people who come after them," Varcoe said. But researchers found a little information about EITC goes a long way. "We're convinced that if people have information they'll act on it," Varcoe said.

    --------------------------------------------------------------------------------
    Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

    Find this article at:
    http://www.usatoday.com/money/perfi/...c_x.htm?csp=26
    Sweet Madame Belu

    Comment


    • #3
      If you check the IRS website you'll find that illegal aliens could and would be able to receive the EITC IF they pay taxes under a social security number, theirs or anyone else's. Given the very limited cooperation of this issue between government agencies, do you really believe that the IRS can check? Also, 36 percent of the 4-6 million illegal aliens of Hispanic decescent estimated to be in this country is over a million illegal aliens collecting money from the U.S. government.


      From the IRS website:
      Do You Qualify for EITC?
      To qualify, a taxpayer must work and have earned income. Earned income includes taxable wages, salaries and tips; net earnings from self-employment; and gross income received as a statutory employee.

      In addition, you must have a Social Security Number for yourself, your spouse (if filing jointly) and your qualifying child. Neither you nor your spouse (if filing jointly) can be the qualifying child of another taxpayer. Generally, you must be a U.S. citizen or resident alien all tax year. You can use the filing status of single, head of household, qualifying widow(er) or married filing jointly. You cannot use the filing status of married filing separately. You cannot have investment income of more than $2,600. You also cannot file Form 2555 or Form 2555-EZ, relating to foreign earned income.

      If you do not have a qualifying child, you must meet three additional tests. You must be at least age 25 and less than age 65 at the end of 2003. You cannot be the dependent of another person. You must live in the United States for more than half of the tax year.

      To claim the credit using a child, the child must be your "qualifying child" by meeting all relationship, age and residency tests.

      Comment


      • #4
        You may also wish to check out this La Raza website: http://www.nclr.org/policy/briefs/Is...efaprilone.pdf

        From p. 1:
        "Because a large and growing share of U.S. low-wage workers is Hispanic, and many of these workers are raising children, Hispanics disproportionately benefit from the EITC."

        Legal or illegal, immigration of low-skilled, poorly educated workers costs the U.S. taxpayer money.

        Comment


        • #5
          One more comment--the study dealt only with Hispanics, who are generally EWI if they are illegal. What about the others, another 4-6 million, many of whom are "illegal" because they were at one time here legally (can you say, "H1-B"), had legitimate social security numbers, and fell out of status?

          Comment


          • #6
            Pay more than at $7/h to illegal aliens and they will not be eligible for EIC.
            Everybody who is working in this country should be eligible for tax benifits.

            Comment


            • #7
              I earn considerably more than $7 an hour and get EIC. Earned income credit time is about the only time i love the government

              Comment


              • #8
                Julie is right.

                I didn't even know I was eligible until I used online software and saw we were owed more than we paid in. I thought it was an error, but it turns out you can get EITC even if you have NO KIDS.

                America rocks!
                Sweet Madame Belu

                Comment


                • #9
                  Hey Schmoe - why don't you spend more time working and contributing to society instead of the countless hours you spend on the internet every day. Then maybe you can stop being such a burden on our government?

                  Comment


                  • #10
                    kgb:

                    You're pathetic. Jealous of a disabled person who also works.
                    Sweet Madame Belu

                    Comment


                    • #11
                      Intended or not, it is clear that a significant number of illegal aliens are receiving the Earned Income Tax Credit. This is talked about quite openly by their advocates. Moreover, in its publications the IRS is signaling that this is a problem. One of three bullet points at the top of Form W-7 used to apply for an ITIN reads: "Receipt of an ITIN does not make you eligible to claim the earned income credit (EIC)."5


                      Amnesty for Illegals Who "Pay Taxes"?
                      Advocates contend that illegal immigrants work hard in jobs Americans will not take, pay taxes, contribute to society, and thus should be able to earn their way to legal status. This concept, euphemistically called "earned regularization," would create opportunities for illegal aliens to receive lawful permanent resident status by earning "credits" in a number of ways, including by paying taxes.
                      The withholding of taxes is involuntary. Federal, state, and local income taxes and Social Security taxes are withheld from paychecks by employers. Workers have no say in the matter. But taxes withheld are not necessarily taxes paid. The United States has a progressive income tax that applies very low tax rates to low-income households. In fact, millions of households pay no federal tax at all. It is believed that the vast majority of illegal residents who file a tax return using an ITIN get full or partial tax refunds because of the low level of their earnings. Indeed, some erroneously receive the Earned Income Credit, intended to supplement the income of the working poor. Thus, ironically, by issuing ITINs the IRS may actually be reducing the tax revenue received from illegal aliens.
                      Providing an amnesty of some sort to illegal aliens is opposed by a majority of Americans.24 There has been little support to do so in the current session of Congress. However, the concept is still being pushed by illegal immigrant advocates, by the Mexican government and by elected officials eager for political support from the large Hispanic community living in the United States.
                      The principal argument these advocates make on behalf of an amnesty is that illegal aliens pay taxes. It is true that taxes are withheld for many illegal aliens, but it is involuntary. Census data show that a high percentage of Hispanics earn very low wages. If illegal aliens were to be "regularized" and authorized to work in the United States, it is highly likely that they would pay little or no income tax. The IRS has important data relating to how many illegal aliens have been issued ITINs, how many have filed tax returns, and the net amount of tax that was paid after exemptions, credits, and refunds. This aggregated information needs to be made available to the public, so that if Congress ever debates the merits of another amnesty for illegal aliens, it can do so based on facts, not platitudes.

                      Comment


                      • #12
                        Looking at our pay stubs the other day, I notice no Federal Tax is being taken out for either of us. What's going on?
                        Sweet Madame Belu

                        Comment

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