January 8th, 2008
By John Peck
UAH students to offer workers free preparation help
An estimated 2,400 low-income families inHuntsvillecould be an average of $2,100 richer this year by taking advantage of a federal income tax credit – but they may not know they’re eligible.
Free tax preparation help is available that will register eligible families for the tax break, the federal government’s largest antipoverty program for low-income working families.
Students from the school of business at the University of Alabama in Huntsville are teaming up with United Wayand AARP to promote the tax credit and help local families prepare their tax forms.
“This is what I would call a symphony of collaboration, what public/private partnerships should be about,” said Stephen Black, president of ImpactAlabama, a nonprofit organization that helps the needy. “Fifteen percent of earned tax credit families are unaware they qualify for the credit.
“That’s millions of dollars being left on the table in Washington that’s due the taxpayers in this area.”
The tax credit generally applies to working families making less than $40,000 a year with kids in the home, or $20,000 with no kids, this tax season. The income limits are up from $33,692 and $11,230 respectively from the 2004 tax filing season.
The tax break is called the earned income tax credit, and some 14,000 families inHuntsvilleare already claiming it to the tune of $28 million. Officials estimated another 2,470Huntsvillefamilies qualify but don’t know it, leaving as much as $5 million in IRS coffers.
Each year, more than 481,000 families in Alabama claim an estimated $1 billion through the tax credit.
However, those same families forfeit $72 million to tax preparation and refund anticipation loan costs. The advanced loans levy interest charges of up to 800 percent annually. Officials hope the free tax help will deter some of the advanced loan activity and also make more families aware of the tax credit.
UAH President Dr. David Williams said the university welcomes the chance to partner with Impact Alabama.
“A very important part of a university’s education is being part of a community and understanding that education doesn’t just take place in the classroom,” Williams said. “This opportunity to let our students learn and practice what they learn in the classroom is just marvelous. Everybody benefits.”
Steve Kirkpatrick with the United Way of Madison County said the free tax help is in keeping withUnited Way’s mission if it reduces dependence on social services.
Impact Alabama is offering the free tax help under an initiative called $aveFirst. Black said some 275 college graduate and law students from 11 campuses (including UAH) are being trained to provide the free tax preparation service in seven cities.
