Earned Income Tax Credit

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• Earned Income Tax Credit
• Cities Helping Citizens to Help Cities
• Arizona League of Cities and Towns
• Conference
• Paradise Valley, Arizona
• August 22, 2008

2
Moderator

• Trinity Donovan
• Councilmember, City of Chandler
• VP, Initiatives, Valley of the Sun United Way

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Welcome

• Shelley Hearn
• Community Relations Manager
• City of Tempe

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Presenters

• Kate Hanley, Executive Director, Tempe Community
  Council
• Margaret Hunnicutt, CPA, President CEO, Tempe
  Schools Credit Union
• Linda A. Jackson, Senior Tax Consultant, IRS
• Diane Demangone Bennett, Director, Tempe
  EITC/Asset Development Initiative

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• Tempe Earned Income Tax Credit
• Asset Development Initiative
• Kate Hanley, Executive Director
• Tempe Community Council
• connecting those in need with those who care

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History When Why

• Economic crisis after 9/11
• Land locked community of 165,796 (2005 Census)
• Significant Poverty
• 18.6 of residents live in poverty - a higher
  poverty rate than Maricopa County (2006 Community
  Survey)

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History When Why

• Many Low Wage Jobs
• More workers are employed in Tempe (147,961)
  than live in Tempe (130,761) (2000 Census)
• Customer Service Representative, most common
  occupation (2000 Census)
• Lack of Affordable Housing
• 24,000 residents do not have affordable housing
  including, entry level teachers and city
  employees (2000 Census)

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History Turning Point

• IRS data indicated that
• 3 - 11 Million
• Earned Income Tax Credits
• unclaimed
• EACH YEAR

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Mission

• Help hard working people
• become financially stable

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Focus

• Years 1-3, promoted the Earned Income Tax Credit
  (EITC)
• Years 3, added strategies to help people move
  out of poverty

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Community Benefits

• Research Indicates
• Pathway out of poverty is through saving and
  accumulation of assets, such as a home,
• education or a business

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Our Strategies

• Outreach
• Tax Preparation
• Financial Education
• Individual Development Accounts (IDAs) for
  Education Homeownership
• Financial Products
• Affordable Housing

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Target Population

• Income Levels
• Individuals, 35,000 or less
• Families, 55,000 or less

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Initiative Partners Roles

• City of Tempe Outreach Public Relations
• IRS Training Expertise
• Tempe Community Council Initiative Development,
  Volunteer Recruitment Management, Coordination
  of Partner Activities, Outreach, Data Collection
  Evaluation
• Tempe Schools Credit Union Site Coordinator,
  Tax Super site No Fee Financial Products
• Newtown Community Development Corporation
  Individual Development Accounts, Financial
  Education Affordable Housing Community Land
  Trust

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Initiative Objectives

• Increase claiming EITC and receiving free tax
  preparation
• Decrease paying expensive tax preparers and
  receiving costly Refund Anticipation Loans
• Connect taxpayers to products, education and
  homeownership opportunities

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Initiative Supporters

• Financial Supporters City of Tempe, United Way,
  Tempe Community Council, Arizona Community
  Foundation, APS, SRP Tempe Schools Credit Union
• Outreach Supporters Schools, Chamber of
  Commerce, Visitors and Convention Bureau, Police
  Department, Housing Services, Non-profit
  Organizations, Faith community, others

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• Free Tax Preparation
• Margaret Hunnicutt, President, CEO
• Tempe Schools Credit Union
• (TSCU)

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Free Tax Preparation

• Open 11 Saturdays, 900-100
• Conveniently located
• Handicapped accessible
• Spanish materials translators

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Volunteer Tax Preparers

• 50 volunteers needed to cover 2 sites
• Source ASU Business School, Tempe Schools
  Credit Union, employers, general public

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Statistics Tax Year 2007 Data

• 927 federal, 823 state tax returns
• Total federal refunds 1,158,650
• Average Federal Refund was 1,240
• 264,900 tax preparation fees saved

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Return on Investment

• Every 1 spent on the Initiative, returned 21 in
  federal refunds
• Every 1 hour of volunteer time brought 395 in
  federal tax refunds

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Public/Private Partnership

• TSCU enhanced the investment by donors and
  volunteers
• No fee, checking and savings accounts
• No fee Refund Anticipation Loan with savings
• Refinance high interest rate loans

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• Financial Education, Individual Development
  Accounts and Affordable Housing
• Diane Bennett
• Newtown Community Development Corporation

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• Financial Education
• Money Smarts for Homeownership
• Analyze Improve Your Credit
• Financial Newsletter
• Homebuyer Education Housing Counseling
• First Time Homebuyer Education
• Asset Development Programs Services
• Individual Development Accounts (IDA)
• Affordable Housing

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Linda Jackson

• Senior Tax Specialist
• IRS

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Getting Started

• IRS SPEC Tax Consultant
• Identify Key Partners
• Seek Advice from Other Initiatives
• Refer to NLC Resources

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Questions for us?

• Shelley Hearn shelley_hearn_at_tempe.gov,
  480-350-8906
• Kate Hanley kate_hanley_at_tempe.gov, 480-858-2300
• Margaret Hunnicutt, mhunnicutt_at_tscu.org, 480-
  967-9475
• Linda Jackson Linda.A.Jackson_at_irs.gov,
  602-207-8881
• Diane Bennett ddb1125_at_aol.com, 602-291-2202
• Trinity Donovan tdonovan_at_vsuw.org, 602-631-4869