The Virginia General Assembly is very serious about making sure citizens of the Commonwealth get the Federal tax returns they're due. It's estimated that up to a quarter of Virginia families eligible for an Earned Income Tax Credit don't file for one.
Randy Litzings of The Fauquier Times-Democrat of an EITC task assistance program at the Community Action Committee in Warrenton, VA
That's why the General Assembly awarded a $230,000 grant to the Virginia Community Action Partnership to support a statewide network of free tax preparation and counseling programs in some 25 communities across the state. In its first month, more than 800 families sought EITC filing assistance through the statewide network.
But that's not all. Recently, two of HUD's major partners - the Virginia Department of Housing and Community Development and the Virginia Housing Development Authority - are working with the Virginia Department of Social Services to encourage households receiving an Earned Income Tax Credit refund to put it into a Virginia Individual Development Account where it will be matched 2 to1 with state or Federal funds.
The "doubling up" can really pay off. "If a family with two children invested $2,000 of their EITC into a VIDA account," explains DHCD Executive Director Bill Shelton, "in two years they could have up to $6,000 saved." The savings, he adds, could be applied to a down payment, for educational expenses or to start a business.
The Earned Income Tax Credit is a refundable Federal tax credit for low-income working individuals and families. For tax year 2006, a family with two dependent children that earned $38,348 may be eligible for an EITC of up to $4,536. In 2004, the typical Virginia family applying received an EITC refund of $1,767.
Contact information for Virginia organizations providing tax filing assistance can be found at www.vaeitc.org