Tax season is officially underway. Families who make less than 49-thousand dollars could substantially beef up their refunds with the Earned Income Tax Credit. But some say the program originally designed to help ease people from public assistance to the workforce may be due for a few tweaks.
Joe Buffler is a retired CPA who runs the United Way’s free tax clinic in Nashville’s Sam Levy housing project. Buffler says he’s already helped several working poor for whom the credit is a godsend.
“Three ladies, all single mothers with children. The total income between the three of them was $39,000. The refund was over $18,000.”
The credit is designed with an incentive: the more you earn, the more you get to keep.
But Buffler says he also sees people who he thinks are gaming the system-making a point of earning just enough to unlock a credit but not so much that they can’t claim assistance checks.
Congressman Jim Cooper says the credit’s income limits probably need to be reset.
“The purpose of this program is to encourage more work, not to encourage more welfare. There are trade-offs in this and we always have to make sure the carrots and the sticks are in the right place.”
Cooper says he’d like to see an overall clean up of the tax code to bring it into line with the current economy. He says that hasn’t really been done since the mid-80s, when President Ronald Reagan lead a massive revamp of the system.
Web extra:
The United Way of Metropolitan Nashville is operating ten free tax preparation sites, plus one mobile tax clinic and another “roving site” this year. The clinics are open to families earning $49,000 or less. To find a tax clinic, call 211.