The income tax program puts more money in people’s pockets and stimulates the economy.
YOUNGSTOWN — Five hundred of Mahoning Valley’s low- and moderate-income and senior residents received a combined $643,446 in earned-income tax-credits with the help of the Mahoning County Financial Stability Partnership.
The partnership, using volunteers at three Volunteer Income Tax Assistance and five AARP, formerly known as the American Association of Retired Persons, sites in the Valley, prepared 2008 federal income tax returns for 2,399 residents.
The number of returns prepared, of which 96 percent were electronically filed, is up 30 percent from the 2007 tax year, said Ginny Pasha, director of Community Investment for United Way of Youngstown and the Mahoning Valley, at a news conference Monday announcing the results of this year’s program.
United Way and the Public Library of Youngstown and Mahoning County, which used a $57,000 grant received from the Financial Industry Regulatory Authority, were funding partners for the program. FINRA is an independent regulator for securities firms doing business in the United States.
“The regulatory authority told us we were the first to bring a library and United Way together in such a project, and let us know we could apply for another grant,” said Carlton Sears, library director.
The earned-income credit is a tax credit for low- and moderate-income workers that reduces the tax they owe, and can lead to a cash refund if the amount of tax they owe is zero, said Steve Phillips, district leader for the AARP Tax Aide Program, and a retired businessman.
Income-eligible families with dependent children also can receive the Child Tax Credit, a federal tax credit for children under age 17.
Using the income tax returns filed this year under the local program, the average earned income tax credit was $1,284, and the average child tax credit was $1,175. “It was not unusual to see couples leave with $4,000 to $6,000 in tax credits, which can be applied toward taxes, or become cash refunds if the tax bill is zero,” Phillips said.
In addition, the people who used the program also saved the money they might have paid for a professional tax consultant, Pasha said.
In addition, Phillips said, there are changes this year in the federal tax laws of which people will be able to take advantage, and with which the VITA and AARP sites can help free of charge. Examples are up to an $8,000 reimbursement for first-time home buyers; sales tax deduction for new cars; up to $1,500 for residential energy and home improvement; and the first $2,400 of unemployment is tax free.
VITA and AARP provide a valuable service to a metropolitan area characterized by lower than average income and higher than average age, Phillips said.
Not only does the Mahoning County Financial Stability Partnership help individuals by putting more money in their pockets to put food on the table and pay for their homes and utilities, by giving them more spendable income, it stimulates the economy, said Mahoning County Commissioner John McNally.