Tax preparation programs like United Way of the Piedmont’s Voluntary Income Tax Assistance (VITA) program could help prevent financial collapse for many who suffered economic losses and hardship during the COVID 19 pandemic. With 10 sites across Spartanburg, Cherokee, and Union Counties help families make ends meet during hard times.
For thousands of working-class families the rent is past due, the lights are about to be out at home, and this year’s tax season and available tax credits could be the only thing keeping them in their homes and preventing complete financial collapse. Individual stimulus money and eviction moratoriums temporarily staved off eviction for thousands in Spartanburg, Cherokee, and Union. But as the pandemic and its affects linger far longer than anyone imagined, so too do the economic hardships.
Utility companies report hundreds of thousands in arears as shut off notices began rolling out in October. Though all major energy companies in the state are working to assist with payment plans, many are still deeply concerned about their ability to pay. Spartanburg County has more that 5,000 families behind on utilities and with bills that exceed $2.5 million dollars.
NBC News recently reported “In South Carolina alone, 52% of renter households can’t pay their rent and are at risk of eviction, according to an analysis of census data by the consulting firm Stout Risius Ross. About 185,000 evictions could be filed in the state over the next four months.”
Though the impending and current peril looms large, tax season may hold the solution for many through tax credits intended to incentivize employment, and making sure people know about them is the key.
The Earned Income Tax Credit (EITC) was a republican-led effort, put in place during the Reagan administration to increase participation in the workforce and incentivize workers into jobs that would otherwise be lost to what is commonly known as the “fiscal cliff” of the public benefit structure. It significantly increased and stabilized mid-to-low wage workforce participation by providing a tax credit.
In United Way of the Piedmont’s three county footprint, more than 41,000 families received an average of $2,586 – with nearly $79 million in Spartanburg County alone. Total amounts in Cherokee, Union, and Spartanburg exceeded $105 million brought back into local economies and helping working families make ends meet. According to the Department of Commerce labor profile, for tens of thousands of workers in retail, food service, and entry-level manufacturing in the Upstate, the average credit is more than 1.5 months wages. Moreover, according to the 2020 Self-Sufficiency Standard, the average credit would cover between 3 and 4 months rent for those staring down the barrel of eviction.
The Child Tax Credit is another key to stabilizing thousands of families through economic hardships across the state. In 2020, the credit increased from $1,000 to $2,000 and is refundable up to $1,400.
Expanding the refundable portion to reflect the total credit could mean months of food, emergency savings, or rent. The additional $2,400 expanding the credit to fully refundable would equal more than a month’s salary for many families in our community.
This year, it matters more than ever that key tax credits for working families are in place and that those families have access to safe, affordable tax preparation services. For more information on finding and IRS-certified tax preparation location near you, visit https://irs.treasury.gov/freetaxprep/
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