Message from the Chairman
To Americans, April 15 means one thing: income taxes. From the person who files the moment he or she receives their W-2 at the end of January, to the procrastinator who shows up on the local news dropping off a return at the post office at 11:59 pm, April 15 is a deadline no one wants to miss.
That's especially true if a refund is due. Unfortunately, many lower-income families may be missing out on an important tax benefit if they fail to check on whether they are eligible for the Earned Income Tax Credit (EITC). The EITC is a refundable federal income tax credit available to working families whose incomes range from $10,000 to $34,000 a year. The program, established by the Ford Administration in 1976, enjoys strong bipartisan support because of its benefits to families and communities. Unfortunately, research shows that between 15 and 20 percent of tax filers who are eligible for the EITC fail to claim it.
For the past two years, the Federal Deposit Insurance Corporation has been encouraging financial institutions to make and promote partnerships with organizations that are leading Earned Income Tax Credit Campaigns across the country. In addition, the FDIC's Community Affairs staff works closely with Volunteer Income Tax Assistance (VITA) sites to provide free help in preparing income tax returns. These initiatives are a direct result of the FDIC's ongoing efforts to work with financial institutions and community groups to deliver Money Smart classes in low- and moderate-income neighborhoods.
Because of the VITA program and the EITC, the FDIC's Community Affairs Officers have been able to report that tens of millions of dollars were returned directly to the families and communities that need it most. In addition, unbanked clients at VITA sites are often given on-site opportunities to open bank accounts for the direct deposit of their refunds, rather than relying on nonbank alternatives that charge high fees.
In this issue of Money Smart News, you'll read details of some of the programs the FDIC has been involved with. And it's not too early to think about setting up an EITC Campaign or VITA site in your community for next year's tax season. To get started, contact one of our Community Affairs Officers listed here: http://www.fdic.gov/consumers/consumer/moneysmart/cao.html
Your involvement can make an important difference in people's lives. One recent VITA client was able to purchase her first home as part of the Los Angeles-area asset building campaign of which VITA is an integral part. Her words say it all: "To own my own home will mean that it's mine, and that I can walk in the door and I can say 'Look what I've done. Look how far I've come.'"
Chairman Don Powell will be discussing what consumers need to know about the basics of banking in the new season of "Moneywise with Kelvin Boston," which is being rolled out now to public television stations across the country. On a show entitled Banking Basics, Chairman Powell discusses the array of financial services and products offered by banks and how consumers can best use them. He also talks about the importance of financial literacy, including the FDIC's Money Smart initiative.
"Moneywise with Kelvin Boston" is designed to help viewers earning between $25,000 and $100,000 understand basic financial planning concepts, increase their net worth, and use their financial resources more effectively. For Moneywise broadcast times in your area, please check your local listings.