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Spreading the word about U.S. tax credit

United Way leads a campaign to inform people of the federal program for low-income workers.

By JOSH ZIMMER
Published March 25, 2005

UNIVERSITY NORTH - Even without a big salary boost, Karen Daley expects to come out way ahead this tax season.

Careful financial planning isn't the reason. As an instructor and applicant screener for the CDC of East Tampa Inc., she makes only $26,000 a year, which supports her and her four children.

The key is that this year - for the first time - Daley applied for the federal earned-income tax credit.

The tax credit is a benefit created by the government for low- and moderate-income workers. A married family with two children can qualify for up to a $4,300 credit - tax free - if it earns below $35,458 ($34,458 for a single parent with two children). On the low end, a single person can receive as much as $390 with an income below $11,490.

Last year, 21-million taxpayers claimed $36-billion in tax credits. But figures show that millions of people who are eligible for the program either don't know about it or don't apply.

Daley was one. Then she met representatives of the Prosperity Campaign of Hillsborough and Pinellas counties. They came to the CDC of East Tampa one day to tout the project. The United Way-led campaign, which involves local charitable and social service groups, aims to inform as many people as possible about the federal program.

Her excitement grew when she learned she could apply for up to three years of unclaimed benefits. Now Daley anticipates receiving about $10,000.

The prosperity campaign is an expanded version of an ongoing effort in downtown St. Petersburg. It proved so successful in attracting applicants that participants decided to branch out in a major way, campaign director Mary Myhill said.

The project also provides free tax return services at dozens of locations staffed by people specially trained in the tax credit program. The new health and social services center on N 22nd Street, just north of Fletcher Avenue, is one of them for other locations visit "Prosperity Campaign" at www.uwtb.org)

Myhill calls the $150,000 budget "limited," but says the campaign has reached hundreds of people.

Businesses like it, too, she said. That's because the tax credit amounts to a pay raise for workers without increasing the cost of doing business. Since the campaign began, local chambers of commerce have sent out informational e-mails to their members.

She estimates that 15,000 businesses will know about the tax credit program before the end of March, leaving plenty of time for workers to apply before the April 15 deadline.

Some parts of the country, such as Chicago, are years ahead of Tampa Bay's tax credit effort, Myhill said.

"I think we're part of a real strong national interest," said Myhill, a former banker who wants to expand the program to reach more people and offer more financial advice. "Millions of dollars went unclaimed in the past because people didn't know about it. One of the reasons it's so important . . . is it encourages work."

For Daley, the tax credits represent a sum she couldn't easily find anywhere else. After paying off her college loans - she earned a business administration degree at Herzing College in Atlanta - she hopes to use the remaining $3,000 to $4,000 on something special.

"I want to buy a house," she said.

Josh Zimmer covers Temple Terrace and the University of South Florida area. He can be reached at 269-5314 or zimmer@sptimes.com

[Last modified March 24, 2005, 08:15:13]