With tax day just five days away, new research from a nonprofit public policy institute shows that Stanislaus County residents could miss out on up to $17 million in Earned Income Tax Credits.
The New America Foundation report shows that thousands of county residents will fail to claim the EITC, a federal refundable tax credit that offers up to $5,600 to lower income workers. Those tax credits could have translated into more than $20 million in economic activity and 134 new jobs, according to the report.
“Research has shown that programs such as the Earned Income Tax Credit have a ‘ripple effect’ in local economies, as most of the refunds are spent at local businesses, which can then hire and pay more workers,” said Maria Sotero, a research associate for the Asset Building Program of the New America Foundation.
In Modesto alone, the report estimates that 69 jobs and more than $10 million in economic activity could be generated if all eligible residents claimed the EITC.
“We found that the EITC refunds, when spent in Stanislaus County and the City of Modesto, translate directly and indirectly into economic growth for small businesses that lead to job creation and tax revenue locally and for the state,” said Antonio Avalos, report co-author and professor of economics at California State University, Fresno.
The report finds that an estimated 800,000 Californians, one in five of those eligible, will fail to claim $1.2 billion in EITC refunds. As a result, the state will lose more than $1.4 billion in sales and 8,200 new jobs.
Stanislaus County is one of just eight counties within the state projected to have more than 20 percent of EITC eligible filers fail to claim their refunds. Six of those eight counties are part of the Central Valley region, however, negating $180 million in total Valley economic impact and 1,100 jobs.
According to the report, counties with high concentrations of Hispanics, significant numbers of low-income individuals, high participation in the food stamp assistance programs, and significant numbers of families with no qualifying children see higher percentages of non-filers. Stanislaus County is 38.9 percent Hispanic, with a low median income of $51,601, and 7 percent of residents receive food stamps.
In 2006, 18.8 percent of Stanislaus County residents claimed the EITC, resulting in over $70 million of local income. Yet, the report estimates that more than $17 million went unclaimed by over 12,000 county residents in 2006, with an average credit of $1,445 going untaken.
Even so, spending from Stanislaus County EITC dollars in 2006 is estimated to have created $74 million in business sales, 487 jobs, and more than $17 million in wages.
“We’ve always known how important these refunds are to California families,” said Anne Stuhldreher, a senior research fellow at the New America Foundation. “This report is the first to show how important they are to our local economies. By encouraging people to find out if they’re eligible for these refunds, we can give struggling families a financial boost and stimulate the economy at the same time.”
To qualify for the EITC, a resident must have earned income, not be claimed as a dependent, and meet certain income requirements.
To learn more about the EITC, including eligibility information, visit www.weconnect.net
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
The New America Foundation report shows that thousands of county residents will fail to claim the EITC, a federal refundable tax credit that offers up to $5,600 to lower income workers. Those tax credits could have translated into more than $20 million in economic activity and 134 new jobs, according to the report.
“Research has shown that programs such as the Earned Income Tax Credit have a ‘ripple effect’ in local economies, as most of the refunds are spent at local businesses, which can then hire and pay more workers,” said Maria Sotero, a research associate for the Asset Building Program of the New America Foundation.
In Modesto alone, the report estimates that 69 jobs and more than $10 million in economic activity could be generated if all eligible residents claimed the EITC.
“We found that the EITC refunds, when spent in Stanislaus County and the City of Modesto, translate directly and indirectly into economic growth for small businesses that lead to job creation and tax revenue locally and for the state,” said Antonio Avalos, report co-author and professor of economics at California State University, Fresno.
The report finds that an estimated 800,000 Californians, one in five of those eligible, will fail to claim $1.2 billion in EITC refunds. As a result, the state will lose more than $1.4 billion in sales and 8,200 new jobs.
Stanislaus County is one of just eight counties within the state projected to have more than 20 percent of EITC eligible filers fail to claim their refunds. Six of those eight counties are part of the Central Valley region, however, negating $180 million in total Valley economic impact and 1,100 jobs.
According to the report, counties with high concentrations of Hispanics, significant numbers of low-income individuals, high participation in the food stamp assistance programs, and significant numbers of families with no qualifying children see higher percentages of non-filers. Stanislaus County is 38.9 percent Hispanic, with a low median income of $51,601, and 7 percent of residents receive food stamps.
In 2006, 18.8 percent of Stanislaus County residents claimed the EITC, resulting in over $70 million of local income. Yet, the report estimates that more than $17 million went unclaimed by over 12,000 county residents in 2006, with an average credit of $1,445 going untaken.
Even so, spending from Stanislaus County EITC dollars in 2006 is estimated to have created $74 million in business sales, 487 jobs, and more than $17 million in wages.
“We’ve always known how important these refunds are to California families,” said Anne Stuhldreher, a senior research fellow at the New America Foundation. “This report is the first to show how important they are to our local economies. By encouraging people to find out if they’re eligible for these refunds, we can give struggling families a financial boost and stimulate the economy at the same time.”
To qualify for the EITC, a resident must have earned income, not be claimed as a dependent, and meet certain income requirements.
To learn more about the EITC, including eligibility information, visit www.weconnect.net
To contact Alex Cantatore, e-mail acantatore@turlockjournal.com or call 634-9141 ext. 2005.
