The Earned Income Tax Credit (EITC) was introduced in 1975, making 2025 the 50th Anniversary of the EITC. The EITC is a crucial tool that allows millions of working families greater financial stability. In 2023, about 23 million eligible workers and families received about $57 billion in EITC. The IRS expects EITC refunds to be sent to taxpayers by March 1. Taxpayers can claim the EITC for up to three prior years.
These refunds can often be the largest single payment that a taxpayer receives during the year. In 2025, a family with two qualifying children can receive $6,960 from the EITC and additional dollars from the Child Tax Credit (CTC) or state earned income credits. These are dollars that families spend within their community and can help stimulate the local economy.
Local leaders can help their residents understand these tax credits and where to get free tax preparation services to secure them. Specifically, municipal leaders can take these four key actions to help their residents during tax time:
Raise the Visibility of Tax Credits and Free Tax Preparation Services
The IRS constantly notes that not all eligible for the EITC receive it. It is not because these individuals do not want to receive the money they have earned, but most do not know they can get these funds because their financial lives have changed. Through outreach activities like public service announcements, devoted municipal webpages and press releases, municipal leaders have an opportunity to raise the visibility of the EITC and CTC so more residents know that they might be able to get a larger refund. Given that filers can claim the EITC from prior years, ensuring the broadest awareness of the credit will help individuals get all the money they have earned.
Additionally, connecting residents with local providers who offer free tax preparation regulated by the IRS can help them keep more of their money and ensure that they are not pushed into a predatory financial product like a rapid anticipation loan. Municipal leaders can personally share information on the providers their residents can use and where these services are located via social media, websites and newsletters.
Start or Strengthen Partnerships
Employers are an important group that can help raise the visibility of the EITC and CTC. Municipal leaders can ask employers within their community to share information on the refundable tax credits with their employees. Additionally, municipal leaders can connect with banks and credit unions to help residents become banked so their refunds can be securely sent to them without having to pay a fee. For those who cannot get a bank account, municipal leaders can work with local businesses, such as grocery stores, to secure a flat fee to process any refund checks from residents, thereby limiting the amount taken to access their money. Once secured, municipal leaders can share this information with residents.
Cities also have an opportunity as employers to make sure that their staff are aware of the EITC and CTC and how if they qualify staff can receive free tax preparation too. Human Resource departments and labor unions are trusted voices and should be asked to share this information with staff. Cities can also host free tax preparation fares for their employees.
Accelerate Savings and Financial Stability
Tax refunds offer an opportunity for families or individuals to make larger purchases, catch up on bills or save for future needs. Municipal leaders have an opportunity to link or support savings programs that highlight the opportunity that tax refunds allow to accelerate savings, such as saving some of their refund in children’s savings accounts.
Help Residents with Scams
Sadly, tax time also brings targeted taxpayer scams. Local leaders can help residents be aware of scams that could impact them and where they should go if something happens. Municipal leaders can help taxpayers submit complaints on financial products sold at tax time via the Consumer Financial Protection Bureau’s complaint website. Additionally, local leaders can connect residents with their state comptroller or attorney general office to submit complaints on fraudulent tax preparers.
All municipal leaders can help their residents secure the refunds they earned, bringing dollars back into their local economy and increasing the financial stability of families and the municipality as well.
Tax Time Resources
- IRS Free Tax Preparation: A resource that explains the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs and a locator tool that can be shared with residents
- NLC EITC Awareness Day Toolkit: Includes a draft press release, a template for emails to partners, a template for a city proclamation and sample social media posts to raise the visibility of the EITC within your community in preparation for EITC Awareness Day on January 31, 2025.
- NLC EITC Opportunity Map: A mapping tool to help local leaders better understand where to target EITC outreach
- NLC Maximizing the Earned Income Tax Credit in Your Community Toolkit: Covers topics associated with creating a local EITC campaign, outreach and public awareness opportunities, residents to multiple benefits and using tax time to help residents build assets.
About the Author
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