Emanuel, IRS Commissioner, Northwestern President, Business Leaders Outline Plan to Put More Money in the Pockets of Working Families

Here are some highlights from this morning’s news conference in Chicago that spotlighted efforts to inform low-wage employees about the Earned Income Tax Credit.

Rep. Rahm Emanuel, IRS Commissioner Doug Shulman, Northwestern University President Henry S. Bienen and CVS Corporation’s Steve Wing today outlined their efforts to ensure working families receive tax breaks through the Earned Income Tax Credit (EITC). In Congress, Emanuel has introduced bipartisan legislation that would help expand the use of the Earned Income Tax Credit. At the press conference, President Bienen and Steve Wing announced Northwestern and CVS’s support for Emanuel’s legislation and discussed their plans to voluntarily alert their employees about the EITC.

Steve Wing, director of workplace initiatives, CVS, congratulated Representative Emanuel for his leadership on the important issue of educating employees about the Earned Income Tax Credit. Wing said that CVS and many other employers have for years successfully helped employees take advantage of the EITC benefits they have earned. Wing said that many companies are using an EITC tool kit developed every year by Corporate Voices for Working Families, a national business membership organization located in Washington, D.C., that represents the private sector on public policy issues involving working families.

283,000 Chicagoans took advantage of the EITC in 2007 and received an average benefit of $2,240. Unfortunately, every year, nearly 95,000 working Chicagoans fail to claim $211 million in tax benefits they are entitled to under the EITC.

“Too many families in Chicago and across America are struggling to get by. The cost of gas, food, education, and health care are skyrocketing. Yet millions of Americans aren’t claiming the Earned Income Tax Credit and are losing out on potentially thousands of dollars that could help them make ends meet,” said Emanuel. “We can’t sit by and let hard-working Chicago families leave $211 million on the table. I’ve introduced a common sense plan that will help the American people get the tax benefits they deserve.”

“The IRS is committed to continuing our outreach efforts with employers, community groups and others to raise awareness about the EITC program. This is one of the government’s largest and most successful programs to help hard-working families, but millions of Americans overlook it. We encourage businesses, both small and large, to help us make their employees aware of the benefits of EITC,” said IRS Commissioner Doug Shulman.

Over the last 30 years, the Earned Income Tax Credit (EITC) has grown into the largest Federal anti-poverty program in the United States. In 2006, 22.4 million tax filers received $43.4 billion in tax credits through the program, with the average recipient receiving more than $1,900. At $4 per gallon, an average EITC check can pay for approximately 32 tanks of gas. However, 7.5 million families eligible for the Earned Income Tax Credit failed to take advantage of the program, costing themselves a total of $14.5 billion in tax benefits.

Emanuel’s bipartisan legislation, entitled the Earned Income Credit Information Act of 2008 (H.R. 6371), requires that employers notify workers that they may be eligible for the EITC. Employers would be required to provide this notice at the same time the employer provides the W-2 form to the employee. The legislation exempts small businesses that have 25 or fewer employees from the requirement to provide their employees with a notice. Emanuel’s legislation is modeled on a bill signed into law by California Governor Arnold Schwarzenegger that requires California employers notify employees of their potential eligibility for the EITC. Emanuel’s legislation was introduced on June 25, 2008 and now has twenty House co-sponsors. Senator Schumer (D-NY) introduced the Senate companion bill.

Photo: Steve Wing told reporters and others attending the news conference that his company and others have been using successfully the EITC Took Kit prepared and distributed by Corporate Voices for Working Families.