The
Issue:
Fifty percent of Americans have less than $1,000
in net financial assets, while 31 percent of Americans
have no or negative savings. This lack of a "financial
safety net" when combined with low wages, makes
it even harder for families to save, creating a
cycle of spending and debt that is difficult to
break.
Low-income families face challenges in preserving
and growing cash assets to achieve goals. These
challenges include lack of cash management/budgeting
skills and of knowledge on available saving and
investing mechanisms. Additional barriers reported
when seeking assistance include cost, stigma, lack
of transportation, rigid eligibility criteria, and
disrespectful service providers.
The Earned Income Tax Credit (EITC) is a refundable
federal income tax credit for low-income working
individuals and families. Congress originally approved
the tax credit legislation in 1975 in part to offset
the burden of social security taxes and to provide
an incentive to work. When the EITC exceeds the
amount of taxes owed, it results in a tax refund
to those who claim and qualify for the credit. To
qualify, taxpayers must meet certain requirements
and file a tax return, even if they did not earn
enough money to be obligated to file a tax return.
The Internal Revenue Service estimates that millions
of dollars go unclaimed by potentially eligible
Knox County residents each year.
An enviornement in which low-income workers and vulnerable populations are aware of social service supports, qualification and opportunities is essential to family well being. In addition, they must access supports and report customer satisfaction, as well as take advantage of the EITC and other tax benefits. Finally, these residents must save, spend and invest their money in ways that advance their financial stability.
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