With tax filing season begun, the nation’s top banking regulator on Friday encouraged national banks and federal savings associations (FSAs) to educate the public about the earned income tax credit (EITC) and free tax assistance programs.
In a statement promoting Jan. 25 as EITC Awareness Day, Comptroller of the Currency Joseph P. Otting (who is also serving as acting director of the Federal Housing Finance Agency) said the refundable EITC, available to low- and moderate-income workers, can help working families as well as “provide an economic boost to the communities that national banks and federal savings associations serve.”
Created in 1975, the EITC is the federal government’s largest program for helping working Americans. The EITC is a refundable federal income tax credit for low- to moderate-income workers to offset the burden of social security taxes. When the EITC exceeds the amount of taxes owed, it results in a refund to eligible taxpayers who claim and qualify for the credit.
The Office of the Comptroller (OCC) notes that last year more than 25 million eligible taxpayers received $63.8 billion in EITCs (credit amounts averaged about $2,488). The maximum amount in 2019 is $6,431 for taxpayers filing jointly with three or more qualifying children, and $3,461 with one qualifying child.
OCC notes that, according to the IRS, just 80% of working families who could qualify every year claim the EITC. Banks and FSAs can help raise that percentage by promoting the credit, the agency said.
The OCC said that in addition to promoting EITC awareness, it encourages banks and FSAs to:
- promote and provide low-cost bank products and services that enable tax refund recipients to deposit their income tax refunds directly into their accounts.
- encourage the use of tax refunds in bank-sponsored savings match programs, also known as Individual Development Accounts.
- sponsor IRS Volunteer Income Tax Assistance programs in branches and support employees who volunteer as tax preparers in low- and moderate-income communities.
OCC says it has District Community Affairs Officers available nationwide to provide information about the EITC and other initiatives to national banks and federal savings associations. More information about the EITC is available on IRS’s website here. OCC also produces a fact sheet, “Leveraging Earned Income Tax Credits to Reach New Bank Customers.”