Help for Working Families

April 13, 1994

At $23,000 a year, a family with children doesn't have a lot of spare change to cover the monthly grind of groceries, utilities and other essentials, much less a little extra with which to face the inevitable emergencies of life. These are usually the families we call the "working poor," families that earn a living but whose wages barely keep them above the poverty level. In some cases, they might even be better off on welfare -- with Medicaid and other benefits -- but they'd rather work than accept public assistance.

Such families deserve a break, and the good news is that tax time actually brings them one. Both the state and federal governments offer an earned income credit, which is available to families that earned $23,050 or less last year and had a child residing in the household for at least six months of the year.

The state credit can save a family up to $1,182 on its tax bill. The federal government's program is even more generous. It offers a credit worth up to $2,364, and sends eligible taxpayers a check for any difference between their tax bill and the amount of credit for which they qualify.

That cash payment is a welcome windfall for many families. For one mother, a $600 reimbursement meant that she could buy clothes for her children -- and at last replace the bicycle that was stolen from her son a year earlier. Another mother hoarded her refunds for a couple of years, then joined forces with her mother to take advantage of loans enabling low-income families to buy a house. Yet another mother refers to her credit as "rug money," the money she hides under her rug for those times when unexpected expenses eat into the family budget.

If the earned income credit has a fault it is the fact that families have to file income-tax returns to qualify -- something that many families who could benefit don't know how to do. It's not too late for this year -- and it's even possible to claim credits back to 1991 by filing amended returns. The Maryland Committee for Children and the United Way of Central Maryland are waging a campaign to get the word out to families who could qualify for the credit. Parents who want more information can call the campaign's hotline at 410-685-0525 or 1-800-492-0618.

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