Five Questions With: Paula McFarland

"We have Volunteer Income Tax Assistance (VITA) sites in all 39 cities and towns completing tax returns for free."

Paula McFarland is the director of the Rhode Island Community Actions Agencies, a membership organization of eight not for profit entities, that serves Rhode Island’s economically challenged citizens. McFarland, who serves on several local, state and regional boards, has worked in causes and effects of poverty since the 1980s. In collaboration with Citizens Bank Foundation and the United Way of Rhode Island, McFarland is launching a public awareness campaign beginning Jan. 30 to educate Rhode Islanders about the IRS’ Earned Income Tax Credit for the upcoming tax return season and how Rhode Island residents may be entitled to free tax preparation services.

PBN: What is an Earned Income Tax Credit and how does a Rhode Island resident qualify?
MCFARLAND:
The Earned Income Tax Credit is a federal and state credit designed to provide tax relief to the working poor, as there are income limits that restrict the eligibility and the amount of tax credit. As income earned increases the amount of the credit phases out both at the federal and state levels. The credit at the federal level is phased out if a family with two children makes more than $43,756 and married parents more than $49,186. For taxpayers without children the maximum credit will be $496 as long as you don’t earn more than $14,590 single or $20,020 married without any children.

PBN: How does the tax credit program affect Rhode Island’s economy?
MCFARLAND:
A worker who receives the EITC pays federal payroll taxes, sales and property taxes, and more. The maximum federal Earned Income Tax Credit received by a filer is $6,143 for a family with three or more children. The Earned Income Tax Credit is seen as means of preventing low-income working families from falling further into poverty as the tax refund is used to put food on the table, pay fuel bills, local taxes, or invest in education. Many working families in neighboring states received a higher Earned Income Tax State Credit than Rhode Island, which is at 10 percent while Vermont is 32 percent, Connecticut is 27.5 percent and Massachusetts is 15 percent.

PBN: What are you, and the Rhode Island Community Action Association, doing to raise public awareness about the program?
MCFARLAND:
We have Volunteer Income Tax Assistance (VITA) sites in all 39 cities and towns completing tax returns for free. RICAA’s network of CAP Agencies prepared over 6,000 tax returns for low income individuals and families, returning over $9.4 million to Rhode Island local communities and more than $3.8 million was from Earned Income Tax Credits received during 2013 Tax Year. All VITA Volunteers are accredited by the IRS to complete tax returns. We launch our statewide campaign on Friday, Jan. 30 at the Museum of Work and Culture in Woonsocket, beginning at 10 a.m. We will have radio ads and local interviews as part of our campaign to inform the public about the free tax preparations along with information regarding the EITC.

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PBN: How does a Rhode Island resident qualify for free tax preparation and where can they go to receive it?
MCFARLAND:
If you and your family make less than $53,000 per year you may be entitled to a federal and state EITC along with other federal credits. It’s fast, just like any other tax preparation site; based upon income eligibility requirements. It’s free for processing a tax return at our VITA locations and you will get a refund in seven to 10 days. We ask that you call Rhode Island’s free help line 2-1-1 for a VITA location nearest you, or go to RICAA’s website at www.ricaa.org for a list of VITA locations.

PBN: How many Rhode Islanders do you expect/hope will participate this year?
MCFARLAND:
While more than 11,000 returns have been completed at a statewide VITA location; the network of Community Action Agencies (CAPs) completed more than 6,000 during the 2013 tax season. Tens of thousands Rhode Island household are eligible and need to apply as it is a struggle to make ends meet and the Earned Income Tax Credit supports low-wage workers and their families by providing economic security.

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