One of the most powerful anti-poverty tools in our nation is one that not enough people know about. It’s called the Earned Income Tax Credit, more commonly referred to as EITC, and it puts money — often hundreds of dollars each year — back into the wallets of hard-working families.
Now, because of recent policy updates and state expansions, more people than ever before qualify for the program, and the EITC Coalition is working hard to spread awareness to help more families save money.
As we’ve seen at the gas pumps and on grocery shelves, the cost of living in San Diego is getting more expensive. The inflation rate in the San Diego area reached 8.2 percent in January— which is higher than the national average.
Additionally, the national consumer price index rose to the highest level since January 1982 last month, according to the Labor Department’s Bureau of Labor Statistics. In the same period, inflation rose about 6.2 percent, which is the largest 12-month increase since 1990.
For many working families, this significantly impacts their financial cushion, leading them spending more income on basic needs. This is money these families might have invested elsewhere within the community — for instance, at restaurants, retail establishments, and other neighborhood businesses.
This is where the EITC can help. Studies have found a link between this tax credit and improved family health, increased school achievement, and higher educational attainment. Additionally, consumer surveys show EITC recipients reinvest parts of their refund locally, helping to boost the local economy by supporting local businesses and jobs.
This work is not new, and since 2002, the EITC Coalition has helped thousands of families and individuals across San Diego County get back the money they earned. Last year, the EITC Coalition helped 29,876 individuals and families file their 2020 returns, which allowed 3,896 filers to claim a total of $6,945,963 from the federal EITC, 5,062 filers to claim a total of $998,857 from the CalEITC, and 3,236 filers to claim a total of $6,416,316 from the Young Child Tax Credit.
Who qualifies for the EITC? Thanks to renewed federal and state investments, the EITC benefits more than 1.8 million additional workers in California compared to past years. As of this year, workers making up to $30,000 per year qualify for CalEITC — the state EITC — including working individuals, families with children, working older adults, self-employed workers, and undocumented ITIN filers.
Combined with the federal EITC and the Young Child Tax Credit, which is available to qualifying families with children under the age of six, families can receive hundreds of extra dollars back on their taxes.
With taxes due April 18, call 2-1-1 or go to myfreetaxes.org to see if you qualify for free tax preparation and to make an appointment. Or, if you need more time, you can file an extension with both the state of California and the Federal government to give you until October to file your return. That will also give you plenty of time to contact 2-1-1 to see if you qualify for the EITC.
This tax season, we hope that every single person who qualifies for the EITC can claim the money they’ve earned. Everyone across our region must be educated on the EITC so we can get cash back into the hands of those who need it most.
Nancy L. Sasaki is the president and CEO of United Way of San Diego County.I Bill York is president and CEO of 211 San Diego.