During these difficult economic times, working families across America are struggling to make ends meet. They deserve relief, especially at tax time.
Last week, I joined Rep. John Lewis and the Atlanta Prosperity Campaign to promote awareness of one of the most important tax benefits available to working families: the Earned Income Tax Credit (EITC).
No program directly benefits working families more than the EITC.
Last year nearly one million Georgia residents received a total of $2.2 billion.
That is, on average, more than $2,300 per eligible family, with some families receiving more than $5,000.
But each year Georgia households miss out on millions in unclaimed tax credits because they don’t know about — or simply don’t claim — the benefits they deserve.
The idea behind the EITC is simple: If you’re a working American with kids and an income under $48,279, you are eligible for a refundable tax credit.
Since the tax credit is refundable, you can receive a payment from the federal government even if your tax credit exceeds your tax bill.
In fact, since the EITC is meant to offset the payroll tax, which every working American pays, you can receive your EITC payment even if you owe no income tax at all.
The EITC is a perfect example of the many ways in which the 2009 Recovery Act — also known as the stimulus — puts money directly into the pockets of everyday Americans.
While the EITC has been around since 1975, the program was expanded in the Recovery Act, which raised both the income threshold and the maximum credit. This means more money for more families.
Along with numerous other provisions, including the Making Work Pay Tax Credit, the First Time Homebuyer Credit, Cash for Clunkers and millions in direct stimulus payments made to older Americans last May, the expanded EITC represents an important part of the stimulus package.
In the hands of American families, EITC benefits can help put food on the table, buy kids new clothes for school, fund a job training course or even add to a down payment on a car or a house.
And like the rest of the stimulus package, the expanded EITC plays a critical role in getting our economy growing again.
Much of the public discussion about the Recovery Act has focused on infrastructure investment.
Indeed, a good portion of the stimulus is funding investments in infrastructure, transportation and economic development all across the country.
Atlanta was allocated $37 million for school construction and another $57 million for economic development.
And just last week, the University of Georgia broke ground on a New Special Collections Library.
The total cost will be $46 million, two-thirds of which will be funded by Recovery Act Build America Bonds.
But the Recovery Act is not only about building schools, roads and “shovel-ready projects.” It’s also about helping everyday Americans — directly.
Neal Wolin is deputy U.S. Treasury secretary.