CHICAGO — Mayor Rahm Emanuel has allotted $500,000 to help low-income Chicago families file free federal tax returns and strongly pushed for them to claim maximum refunds Wednesday.
The mayor announced he'd draw the funds from $11.9 million the city reclaimed last year in tracking down local tax scofflaws.
The additional funding will allow the two groups to add volunteers and increase hours to enable them to process returns for 7,000 additional families over the next two years.
The mayor is seeking to help more people take advantage of the Earned Income Tax Credit, which Emanuel called a "progressive tax cut" for families making about $50,000 and individuals making half that.
Emanuel said that 300,000 Chicago families make use of the EITC each year, to the tune of about $2,300 in refunds on average. Yet an additional 100,000 don't, leaving an estimated $230 million unclaimed.
Emanuel blamed a needlessly complicated eligibility document that he said is more than 50 pages long.
"It's nuts!" he said. "I think it would be a huge mistake for the City of Chicago for working families to leave $230 million out in Washington rather than in their checking accounts here in Chicago."
He urged Chicagoans to consult the taxprepchicago.org web site and said the EITC refunds would, in effect, serve as an economic stimulus package.
"I want to make sure that the City of Chicago sets records in making sure that families, the 100,000 families that have this available, are eligible for it, take it," he said. "It's good for them, it is great for their neighborhood, and it's good for the City of Chicago."
Emanuel and David Marzahl, chief executive officer of the Center for Economic Progress, emphasized that the return help was being offered for free. For-profit tax-return services charge fees, commissions or interest on advance loans made on refunds. They added that Illinois just increased its EITC refund on state returns.
They made the announcement at Harold Washington College in the Loop, one of the locations for free help on tax returns.