IRS seeking taxpayers who qualify for earned-income credit

March 22, 1993|By Holly Selby | Holly Selby,Staff Writer

Good news for low-income families: The Internal Revenue Service, best known for collecting money, wants to send you some.

Thousands of Maryland parents can collect up to $2,211 per household simply by filing a tax return. But many eligible people don't know about the benefit.

Not a refund, this is extra money due under a provision called the earned-income tax credit, a benefit to help keep low-income families off welfare and above the poverty line.

The IRS wants to reach people like Elizabeth Lindo, a single mother in Baltimore who has a 7-year-old son and began working as a data-entry specialist for the Maryland Committee for Children last summer.

She discovered the program through her employer and already has received a government check for $1,770.

Another typical recipient is Roxanne Proctor, a Landover single mother of two, who works as a pharmacy technician for about $11,000 annually.

Her daughter's day care center alerted Ms. Proctor to the earned-income tax credit.

She expects a check for about $1,000 -- and now is a fan of the IRS. The agency, she says, can "make a person feel real good inside."

Family eligibility generally depends on the following:

* Full-time or part-time employment during 1992 (being employed for only part of the year counts, too).

* Earned income was less than $22,370 and was reported.

* During 1992, at least one child, grandchild or stepchild lived with the family for more than six months (all year if a foster child).

* The children were under age 19 (under 25 if a full-time student; no age limit if permanently disabled).

In addition to the earned-income credit, other benefits accrue if a child was born in 1992 and if the family paid for their children's health insurance.

The maximum from the earned-income credit and the other benefits is a total of $2,211 per family.

Although the earned-income tax benefit has been around for more than a decade, many people continue to lose out, says Domenic J. LaPonzina, IRS spokesman for the Baltimore district, which includes Maryland and Washington.

These people either are uninformed or shun the tax system because they are suspicious of government in general.

Last year, just 265,465 of an estimated 400,000 eligible households in the district took advantage of the earned-income credit.

But this year the benefit has received more attention through President Clinton's much-discussed plans to reach out to working families; one of his ideas is to expand the credit to include working people without children.

Moreover, an increasing number of Maryland organizations have joined the effort to get the word out to low-income households about the tax benefit.

"Everybody gets something out of it: businesses, because it puts money back into the economy; the government; and, of course, the people who get the money," says Debra Mitchell, a spokeswoman for the Maryland Committee for Children. According to the IRS, 60 percent of those eligible for the benefit are female heads of households. Even if a family owes no taxes because of low income, the family can receive a check from the government simply by filing a tax form. For example, if a single mother with one child makes less than $7,500 annually -- and therefore isn't required to file a tax return -- she can still file a return and claim the benefit.

"It is the only credit that you get back even if you don't owe taxes," Mr. LaPonzina says. "You may even be due a refund and you will still get your credit."

Many people who don't claim the credit may not be well-educated, may be relatively new to the country or simply may be distrustful of any kind of government agency. "It may be lack of knowledge, inability to complete the form, or fear," Mr. LaPonzina says.

In the past few years, the IRS has stepped up its efforts to reach people who might qualify -- including placing ads on Giant Food milk cartons and Safeway grocery bags this year.

The Maryland Committee for Children is flooding the Department of Social Services and day care centers with fliers and placing billboards on MTA buses to reach parents. Targeting day care centers is efficient, because "you've got people working and you've got kids -- already you've got two of the requirements to qualify," Ms. Mitchell says.

And in a church at Fayette and Greene streets, students at the University of Maryland School of Law offer free tax preparation aid in hopes of drawing in those who qualify for the earned income credit. The program is one of about 200 Volunteer Income Tax Assistance sites throughout Maryland and Washington, D.C., authorized by the IRS to give free aid to low-income earners and the elderly.

"There are people out there who we really should be bringing in. They don't file because they just don't know about it or they are afraid," says Suvita Sedlak, a first-year law student and volunteer.

WHERE TO GET HELP

* Many free tax workshops are being held in the Baltimore area to help low-income people get their rebates. To find a program near you, call the United Way's First Call for Help: (800) 492-0618.

* A free IRS publication about the rebates and the IRS call-in service can help: (800) 829-1040, or in the Baltimore area, 962-2590.

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