NEWS INFORMATION FROM

THE OFFICE OF MAYOR STEPHEN R. REED
City of Harrisburg
King City Government Center
Harrisburg, PA 17101-1678
Telephone: 255.3040

FOR IMMEDIATE USE
8 April 2003

MAYOR URGES CITY RESIDENTS TO TAKE ADVANTAGE OF FEDERAL EARNED INCOME TAX CREDIT AND STATE TAX FORGIVENESS PROGRAM; THOUSANDS IN TAX REFUND MONEY AVAILABLE TO CITY RESIDENTS

Harrisburg, PA—Many Harrisburg residents are eligible for individual federal and state tax refunds totaling into the thousands of dollars, said Mayor Stephen R. Reed today, as he urged city residents to apply for the federal Earned Income Tax Credit (EITC) program. The income-based refund program significantly reduces the annual federal payroll tax deduction for the working poor, allowing for increased weekly take-home pay, and in many cases, a substantial refund from the federal government. The payments are even available to working persons who have paid little or no federal income taxes.

Considered the largest, most effective anti-poverty program ever initiated, Mayor Reed said the EITC benefits both individuals and families earning less than $33, 178. A single worker with no dependents can receive an additional $376.00 in reduced deductions, while a single working parent with two children could get up to $4,140.00. An added benefit is that workers may apply for the tax credit for the past three years, resulting in a potential lump sum payment of over $12,000.

Reed said in 2001, nearly 12,000 EITC filings were made by Harrisburg residents, resulting in an average refund check of over $1,500.00 per person, or more than $17 million in local annual economic impact.

“The Earned Income Tax Credit program is a very significant means by which working citizens earning modest income can improve their fiscal circumstance,” said Mayor Reed. “With the substantial amounts of some refund checks, someone who needs a car to get back and forth to work can now buy one, or put a downpayment on their own home, or even use the money for continuing education to secure a better job.

“The best thing about this is that it is entirely free. Every worker making below poverty level wages can get an immediate increase in the amount of cash they take home every week. Workers need only file a federal W-5 tax form with their employer at any time of the year to be considered for the program. Filing for the program is free and costs the employer nothing,” added the Mayor.

Nationally, Reed said it is estimated that only 1/3 of the persons eligible for the EITC take advantage of it, primarily because they are unaware of it. In ad- dition to the federal Earned Income Tax Credit, low and moderate income workers do not have to pay the 2.8% Pennsylvania Income Tax, so long as they meet eligi- bility standards and file a Special Provision form with the state Department of Revenue. If they have already paid state income tax for the previous year, it will be fully or partially returned to them.

The state tax forgiveness program says the following workers do not have to pay state income tax if their income is below: single person - $8,750 or less income; couple - $15,250; single parent with one child - $17,750; couple with one child – $24,250; couple with two children - $33,250, and add another $9,000 for each additional child in maximum income. Persons making somewhat more than these amounts may be entitled to a partial tax forgiveness or refund.

For questions about the Federal Earned Income Tax Credit, call the IRS toll- free number at 1-800-829-1040 or visit www.irs.gov . For the state tax forgiveness program, call 1-888-PATAXES, or visit www.revenue.state.pa.us.

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