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It was a simple enough request, but one that 39-year-old Lydia Collins couldn’t fulfill.
Four years ago, her teenaged daughter Victoria wanted a new dress to wear to her graduation from Meredith Elementary. But Collins, having just been laid off and both working and attending college part-time, had no money for a dress for her eighth-grader.
So she decided to file her taxes of the past four years, and learned she was eligible for the Earned Income Tax Credit (EITC). That year, the resident from the 1700 block of McKean Street received an EITC of around $4,000.
Not only did Victoria get her dress, but the money paid for tutoring services, as well as her mother’s college tuition and books.
"It was a periwinkle-blue dress with spaghetti straps," recalled Collins of her daughter’s purchase. "It was just so flowing. Just to see her walk in that dress at graduation was so exciting. She glowed like a little princess — a little Cinderella at the ball.
"It means so much to give your children what they need and want," she added. "Just to ask for a dress is nothing. She wanted to be beautiful, and I was happy that I was able to do that for her."
Since 1998, Collins has faithfully filed for the EITC. This year, she was the first EITC filer from South Philly, and earned a whopping $2,377.
"I just started crying. I didn’t realize how far I had come. It’s exciting to know that you have accomplished so much, and I’m still trying to accomplish much more," said Collins, who wants to buy a house and a car and continue her education.
EITC is a tax benefit for working people who earn low or moderate incomes (less than $33,178 a year). It reduces the tax burden on these workers and supplements their wages, helping families to build assets. Tax refunds can total $4,140 per year, based on family size and income.
On Jan. 30, a new campaign was launched to raise public awareness for the EITC among low- and moderate-income households. Managed by the University of Pennsylvania’s Center for Research on Religion and Urban Civil Society, the Campaign for Working Families has two goals: to increase both the number of Philadelphia residents who file for the EITC and who receive free tax-filing assistance.
The campaign also is being waged in 23 other cities, said Jackie Bratten of the Reinvestment Fund, which is one of at least 10 operating partners in the campaign.
"There is a lot of money being left on the table in the Philly area — about $85 million for families who qualify for the EITC, and $84 million was unclaimed last year," Bratten noted.
Through the United Way of Southeast Pennsylvania, the campaign has recruited and trained a total of 560 volunteers, including all levels of accountants — from students to those with master’s degrees, said Bratten. She added that volunteers need not have a head for numbers; many law students also have signed up to help.
The IRS provided volunteer training. With the brunt of tax season yet to hit, the campaign still needs volunteers, Bratten said.
The volunteers operate 26 free tax-filing sites in neighborhoods throughout the city. Locally, the three sites are at the South Philadelphia Library at 1700 S. Broad St., Greater St. Matthew’s Church at 2319 Fitzwater St., and Cobbs Creek Library at 5800 Cobbs Creek Pkwy.
Those who qualify have until April 15 to visit one of the sites. While walk-ins are welcome, Bratten suggests that candidates find out more information first by calling the hotline, which has logged more than 5,500 calls since Jan. 13.
In addition to running a volunteer site, Bratten manages all the campaign data collected via anonymous surveys taken at the free tax-filing sites.
"If we can learn that we’ve helped X amount of people, that is a success story right there," she said. "Or if we can show X amount of people got the EITC and that X is the dollar amount they received, imagine what that says."
One of the campaign’s greatest success stories is Collins, who decided to become a volunteer this year as well.
"This will allow me to help others understand how valuable and important filing taxes under EITC can be," she said.
Her personal goal is to one day consider herself financially sound. "I’m excited about meeting the challenge. Because it is attainable. It is the American dream. Why shouldn’t it be attainable for me?"
According to the Brookings Institution, in 2000 the average EITC claim was $1,709 per household. Close to one out of four tax filers in Philadelphia received the EITC in tax year 2000. City residents earned a total of more than $252 million from the credit.
Bratten said most recipients will use the money to pay off credit-card and holiday bills, take a vacation or put toward a down payment on a home.
The study also reports that in Philadelphia, more than 41 percent of EITC filers used commercial tax preparers to obtain a "refund anticipation loan," better known as "rapid refund," said Bratten. The average price that an EITC earner can expect to pay for a rapid refund loan is roughly $100, but can be much more than that during tax season.
The interest paid on these loans can be as high as 800 percent, according to Bratten. "People need to realize it’s a rip-off."
As of Feb. 7, more than 1,000 returns had been filed at the 26 sites. The goal for this tax season is to reach 7,300 EITC filers, Bratten said.
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For more information about the EITC and free tax sites, or to volunteer, call the hotline at 215-686-2599.
