Tax Credits for Working Families

Connecting the self-employed to the EITC

April 12th, 2011

Self-employed low-income individuals in 15 cities are getting a boost again this year from a program that provides them with free or low-cost tax preparation and help in using the Earned Income Tax Credit (EITC) and other tax credits to grow their businesses.

Community organizations funded, in part, by the Self-Employment Tax Initiative (SETI) have served more than 33,000 self-employed businesses since 2007. Many of them are startups and this is their first encounter with business tax preparation and having to complete a Schedule C, the IRS profit and loss statement. It is a great time to provide them access to asset-building services, and that’s what SETI does. In 2010, 62 percent of the 12,583 self-employed individuals assisted earned a combined $11.6 million in refundable tax credits from the Earned Income and Making Work Pay Tax Credits.

This year SETI, a program of the Corporation for Enterprise Development (CFED), is working with 15 partners in a range of U.S. cities, including Brooklyn, N.Y., San Francisco and Oakland, Calif., San Antonio, Austin and El Paso, Texas, Detroit, Philadelphia, Pittsburgh, Chicago, Seattle, St. Paul, Minn., Kansas City, Mo., Great Falls, Mont., and Jacksonville, Fla.

As the unemployment rate remains high, state policymakers are coming to realize the benefits derived from self-employed business development. Some low-to-moderate income people who lose their W-2 wage job in today’s restructured economy go on to create their own job through self-employment. Programs like SETI can make it more likely they will succeed, in part by ensuring that they access the working family tax credits for which they are eligible.

Posted in Earned Income Tax Credit, Family Tax Preparation and Filing, Recent Updates | Comments Off

Comments are closed.