According to the Benefits Data Trust, 40,000 eligible Philadelphians left over $100 million in unclaimed Earned Income Tax Credit (EITC) money in 2016. While the latest data available is 6 years old, Domb expects that the number of people who are eligible for the credits has increased by thousands.
The EITC is a federal tax refund for working people who filed a tax return are eligible. According to the city of Philadelphia’s Department of Revenue, qualifying people can receive up to $6,728. All reimbursements are based on marital status and the number of children the tax filer claims.
So why are so many Philadelphians missing out on thousands of dollars owed to them?
In a recent interview, Domb told the Philadelphia Tribune that a lack of information is to blame. Although he has tried for the last six years since assuming his City Council seat, people are generally unaware that there is money that they can claim.
In February, City Council unanimously passed Domb’s legislation that will require employers to notify employees of possible eligibility for the tax credit.
While getting the word out about the EITC is important, Domb is also pushing for awareness about the Child Tax Credit. Some funds can help parents, and they don’t even know.
While speaking with Mary Arthur, the CEO/president of the Campaign for Working Families, Domb said he found out a mother secured substantial funding through the Child Tax Credit.
“One mom of five or six kids got $20,000,” Domb said. “That’s a lot of money.”
Getting city officials on the right page about the right way to push and advertise these benefits has been a fight for Domb. He said that he wants a deliberate push from the Department of Revenue, clearly outlining to the public how to check their eligibility and how to apply for benefits.
Ideally, Domb said he wants to work with payroll companies such as ADP and Paychex to provide information with W-2 statements that notify employees that they may be eligible for these tax credit benefits.
Domb said he has tried to work with the federal government to incorporate this benefits information. He has proposed a pilot program between the city and the IRS .“What we wanted them to do was to blend the returns into the programs and send out a notification,” he said.
Domb said of the top 50 cities in the country, Philadelphia taxes lower-income people the highest.
“We tax them at a rate of 18.1%,” he said. “Other cities average between 10 and 14%.”
Domb said that the city’s revenue and finance departments said that over 50,000 families would qualify for these benefits and tax credits.
“Depending on their income levels and dependents, if you don’t have kids, you won’t get that much, but if you have kids, you’ll get much more,” Domb said.
However, only 1,500 applied last year.
“It’s a lack of awareness,” Domb said. “In a city where so many families live in poverty and struggle to pay their bills or put food on their tables, money from these tax refund programs has the potential to make a real difference.”
Brian Saunders is a reporter for the Philadelphia Tribune, where this story first appeared.