Auburn-Gresham tax prep center opens
John McCarron
Published: March 8, 2004
What's the fastest way to raise the buying power of a working-class neighborhood? That is, short of dumping $20 bills from a helicopter?
It's getting wage earners to file for the Earned Income Tax Credit, or EITC, one of the most potent—and least understood—federal income support programs in the new era of welfare reform.
Helping working families claim the tax credit will be a key tactic in NCP neighborhoods, with two new tax preparation centers to open soon in Pilsen and Auburn Gresham.
Written into the tax code by Congress in 1975, the EITC now lets wage-earning families claim a tax refund of up to $4,204—even if they had no withholding by their employers. Refunds vary according to family size and income, but the national average is almost $2,000.
Trouble is, roughly a quarter of those eligible don't apply. So, even though working families in Illinois receive more than $1 billion a year from the credit, another quarter billion is left on the table. With 60 percent of the state's eligible residents living in Chicago, blue-collar neighborhoods are missing out on about $150 million every year.
Little wonder, then, that the New Communities Program has recruited the Center for Economic Progress to help boost the economic literacy, and fortunes, of hard-working families.
Claiming every deduction
The center's Tax Counseling Project is one of the most successful programs of its kind in the nation. In 2003 its free tax prep service helped some 20,000 low- and moderate-income wage-earners file their returns and claim every deduction and credit due them.
More tax preparation centers like this one in Uptown will open next year.
Photo: Andrew Campbell
"This year we had 20 tax sites," said David Marzahl, the center's executive director. He said a five-year grant from the MacArthur Foundation will enable it to serve NCP neighborhoods not just with tax preparation, but other financial services often lacking in have-not neighborhoods.
"We're moving to a more integrated approach," said Marzahl, ticking off a menu of transactions the center can enable: opening a savings account; applying for Food Stamps and SSI disability; training home-based childcare providers; counseling against predatory loans. The center also advocates for EITC in Congress and urges its full extension to the Illinois income tax.
Pilsen and Auburn Gresham
Many of the center's financial services will be available at the new NCP-sponsored locations opening in January: one serving Pilsen and Little Village at Instituto del Progreso Latino, 2570 S. Blue Island Ave.; the other in Auburn Gresham at St. Sabina's Employment Resource Center, 7907-11 S. Racine Ave. Each is getting LISC funds to upgrade counseling spaces and computer capacity.
CEP is already working in Logan Square and North Lawndale. And Marzahl said he'll look next at South Chicago.
The power of these centers was much in evidence last April 14 in the student activity room of Truman College in Uptown. Scores of blue- and pink-collar workers had come seeking free help with their 1040 Forms. But the two dozen corporate volunteers and their networked Dell laptops were coming up with a lot more than 11th hour help with confusing paperwork.
A part-time hotel parking attendant named Diallo was all smiles about the $1,200 refund he'd be getting because volunteer Deborah Edwards, by day a financial analyst with GATX Corp., discovered a few important things about his situation. Besides the EITC, she said, Diallo could claim as a dependent a young nephew for whom he provides sole support.
"Some cry when they see the refund they're due," said Ellen Sheahan, assistant site manager at Truman. "But some of our best work has nothing to do with taxes. This is a great time to see if people qualify for food stamps, or want to open a savings account."
Said Marzahl: "This is about using what neighborhoods already have. It's about boosting incomes, building assets, creating financial stability."
Contact: Mary Ruth Herbers, Center for Economic Progress, 312-252-0280, ext. 281; Byam Alexander, Employment Resource Center (Auburn Gresham), 773-783-3760; or Juan Salgado, Instituto Del Progreso Latino, 773-890-0055.
Posted in Business, Housing, Economic Development