What if there were a way to create a huge economic impact — tens of millions of dollars — for our community without spending an additional dime? There is. And the impact is real.
CKEEP, The Central Kentucky Economic Empowerment Project, provides free tax preparation and filing services for hardworking families earning less than $50,000.
It is a collaboration among United Way of the Bluegrass, Community Action Council, Lexington Fayette Urban County Government, University of Kentucky, Kentucky Domestic Violence Association, Internal Revenue Service and others. The program focuses on ensuring those eligible for the Earned Income Tax Credit, or EITC, are able to claim it along with other tax credits.
The result: up to $5,750 in EITC goes back into the hands of working families and ultimately is spent in local stores.
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Why is this important for our community? For starters, the free service can be a benefit employers can offer employees. It also encourages people to work as the EITC is only available to those who are employed. Workers have more money coming back through EITC and are able to save money in taking advantage of the free tax preparation and filing services. As such, they will have more money to spend and to add to savings accounts.
The ripple effect caused by the re-spending of income circulated within local stores will be felt many times over. In fact, if all those eligible took advantage of the service, Central Kentucky could see an impact of tens of millions of dollars in our local economy. In essence, this is our community's own version of a stimulus plan.
A critical program in helping families become financially stable and independent, the EITC brings more children out of poverty each year than any other federal program. Our research of CKEEP clients shows that families are using EITC and other refunds for essentials. Unfortunately, the fees many commercial preparers charge for tax preparation and refund anticipation loans greatly diminish the impact of the EITC for families that qualify. CKEEP's service offers free tax preparation with fast returns so that those who need it can keep all of their refund.
Last year, the coalition prepared 3,000 returns, which provided nearly $2 million in EITC. In all, this free tax preparation program brought $5.32 million in refunds back to Central Kentucky workers, and back to our local businesses. This is in addition to at least $375,000 saved by hardworking families in not having to pay to prepare and file their tax returns.
To further impact these individuals and our community, participants are encouraged to enroll in United Way's Back On Track program. By putting their tax return into a savings account to be used for furthering one's education, buying a first home or starting a small business, up to $2,000 of someone's return could be tripled to $6,000.
The program is not a loan; the participant receives the money after completing a series of financial education classes and other important steps. This program extends the tax return into life-long assets to improve lives and the Central Kentucky community.
Scheduling an appointment for the free tax services is easy. Simply dial 2-1-1. United Way 2-1-1 call specialists can walk callers through the process, schedule an appointment and even inform the caller about what paperwork is necessary to bring.
United Way 2-1-1 can also assist callers with other concerns. It serves as the community's non-emergency help and referral source, connecting those in need with local assistance programs.
While the services are free, we do need your help. Surprisingly, some who are eligible for the EITC aren't aware it exists.
We need you to help spread the word. Through emails, Facebook, Twitter, Web sites and other means, please inform those you know about CKEEP and the free tax service.
If you would like, flyers or envelope stuffers are available for your office, church or other organization.
Together, we can help our local families claim the money they've worked so hard to earn and provide a boost to our economy.