Tax help for low-income residents

It’s tax season again and some Queens taxpayers could be eligible for free tax preparation and not even know it.
So City Councilmembers Leroy Comrie and Eric Gioia have joined forces with Bishop Mitchell G. Taylor, founder and president of the Long Island City-based East River Development Alliance (ERDA), to remind low-income taxpayers that there are resources available to them that could help lessen their tax burden this year.
For the third year in a row, ERDA, in partnership with FoodChange and Citizens for New York, is working to educate low-income New Yorkers about tax credits for which they may qualify such as the Earned Income Tax Credit (EITC) and the Child Tax Credit. Additionally, the organization is also providing free tax preparation to those who qualify.
The EITC offers federal, state and local tax breaks based upon personal income levels and dependants. In 2005, a family with at least one child earning less than about $40,000 qualified for the credit. Without children, a single person who earned less than $12,000 or a couple that earned less than $14,000 qualified.
Estimates put the number of eligible New York City residents who qualify for the EITC but who do not apply for it at 230,000.
According to Taylor, ERDA recovered almost $800,000 in refunds for its clients in its first two years. This year Taylor hopes to increase that number to $1 million.
“I want to urge all low-income and working class tax filers to take advantage of free tax preparation programs like the East River Development Alliance is offering,” said Comrie.
But Taylor explained that ERDA provides more than free tax preparation.
“[It’s] part of a larger picture of financial education in our community,” he said, referring to the borough’s public housing residents.
Taylor said that ERDA relies on a holistic approach to finances in which each client had an opportunity to meet with a financial counselor to discuss goals such as paying for a child’s college education. Clients can also open minimum-free bank accounts and be screened for additional public benefits.
On another note, the trio warned consumers about a new loan product—the pay stub Refund Anticipation Loan or pay stub RAL—that they said masqueraded as an easy way to get a refund fast, but was actually an expensive personal loan.
Marketed by names such as “Fast Money,” “Instant Money” or “Rapid Refund” they promised tax refunds in a matter of hours.
“Far too many of our citizens are unaware of tax relief or are tricked into a rapid rip-off scam,” said Gioia, using a play on words.
While it is not the only company to offer the product, the three took particular issue with the “You Got People” advertising campaign from H&R Block which they said targets urban, low-income neighborhoods.
“When people are already strapped for cash and a tax preparer says you can get [your refund] back in two hours,” it sounds good, said Taylor, explaining that by taking the loan the taxpayer receives a reduced refund after paying interest and fees associated with the loan.
H&R Block did not respond to an e-mailed request for comment.
Taylor said that if more people knew they were able to get their refunds from the IRS in a matter of days by filing electronically and having it deposited directly into a bank account, RALs might lose their appeal.
ERDA is located inside the Center of Hope International Church located at 12-11 40th Avenue in Long Island City. Free tax preparation is available throughout February and March by appointment only. Call 718-784-0877 to schedule an appointment.