Nicole Brodeur / Times staff columnist
Collecting the small rewards

E-mail this article Print this article Search archive Most read articles Most e-mailed articles

It's called an Earned Income Tax Credit (EITC), and is available to families that earn $34,000 or less, annually. It sounds deadly boring, so let me put it this way: If you have one kid and earn less than $29,666 a year, you could have an extra $2,547 in your pocket.

With me? Not enough are.

As many as 7 million low-income households are missing out on more than $12 billion in tax refunds, according to the Association of Community Organizations for Reform Now (ACORN), which represents 150,000 member families across the country.

Last week, ACORN reported how much 100 cities could have flowing through their economies if more knew about the credit.

In Seattle in 2002, 36,876 households collected an average EITC refund of $1,338.

But that same year, some 6,500 households missed out on their benefits, resulting in $8.7 million unclaimed and unspent — much of it in low-income neighborhoods.

But ACORN found that some of the money is showing up in the wrong places — at tax preparation firms that offer "advance" EITC refunds at exorbitant interest rates.

So, armed with a $1 million grant from the Seattle-based Marguerite Casey Foundation, ACORN is teaching people about the money they deserve. And it is putting pressure on local governments to require tax preparers to inform clients of all of their options — not just offer fast money at faster rates.

"It was a direct investment to bring money back into the communities," said Casey spokesman David Brotherton.

A Seattle City Council committee will review the issue Thursday.
 
I headed out on Labor Day to ask working people if they had claimed their due.

At the Crossroads Shopping Center in Bellevue, I found Cheryl Heath, 44, on a smoke break from her job at Old Navy. She told me the EITC had allowed her to recover almost all of her federal taxes back.

And she did all the filing herself, so she's never paid interest to anyone.

"The 1040A is a simple form to do," Heath said. "Follow the directions. You get it back in three weeks."

And then what?

"I usually put it back into my kids. School clothes, supplies. Right back into the economy."

Berni Spackman, 48, is a receptionist at a hair salon. She applied for the credit when her son was younger but found it much ado about too little.

"The thing is, when you're at a certain level, it goes to the rent anyway," she said. "It's like when you're a dog and they give you a tiny bone. It takes away, for a little while, the fact that you're starving most of the time.

"What would make a difference is a higher wage."

Nicole Brodeur's column appears Sunday, Tuesday and Thursday. Reach her at 206-464-2334 or nbrodeur@seattletimes.com. She bought candles for hope.