Believe it or not, Earned Income Tax Credit Awareness Day is almost upon us again. Have you bought your presents? The traditional gift is a financial wellness platform! Ok, ok, ok, it’s not; but it should be.

January 26 is Earned Income Tax Credit Awareness Day1 and that means this is a wonderful opportunity to open a conversation with your employees about the benefits of both the EITC and a financial wellness platform which can provide answers about what it is, why it’s important and why it should matter to them.

Employees Likely Living Paycheck to Paycheck

There is a likelihood that some amount of your employees are living paycheck to paycheck despite what role, salary or lifestyle they possess. A CareerBuilder survey2 reveals 51% (over half!) of those making less than $50,000 are living paycheck to paycheck. Given the EITC applies to those making less than $53,930, this tax credit is particularly important for this demographic.

20% of Taxpayers Miss Their EITC

According to the IRS, 20% of eligible taxpayers are unaware of the option of the EITC and how it may benefit them.  This also means it’s likely 20% of your employees are unaware of the Earned Income Credit as well. The problem is so prevalent the IRS has a webpage about it3, a toolkit for employers4, and they created an entire day of awareness!

Employer Responsibility

As an employer, the Treasury Department encourages notifying employees5 whose wages for 2017 are less than $53,930 that they might be be eligible for Earned Income Credit (EIC).  Despite the provided toolkit, the fact remains that most adults are confused by taxes, with one survey revealing the average score of 51% on a basic tax test6!

Workplace Financial Wellness

The general confusion about taxes is only a symptom of the larger problem: a lack of a financial education. Not only do your employees likely have financial questions and concerns, but they have few immediate resources to provide qualified information and actionable steps. EITC Awareness Day is an opportunity to engage your employees regarding their taxes, provide a “heads up” about tax prep, a litmus test of their tax knowledge and also an opportunity to test the effectiveness and need for a financial wellness platform.

What Else Don’t Your Employees Know?

It’s a worthwhile question to ask: if my employees don’t have a basic knowledge of taxes, what else don’t they know? In fact, if most of your employees are stressing about financial matters, and studies show they are, (85% of Americans feel financial anxiety.7) would having access to a financial education, and more reliable resources make a difference? We think so. But we’re biased.

 

 

1. www.eitc.irs.gov/partner-toolkit/eitc-awareness-day/eitc-awareness-day-2

2. https://www.prnewswire.com/news-releases/two-thirds-of-minimum-wage-workers-cant-make-ends-meet-careerbuilder-survey-finds-300311840.html

3. www.irs.gov/newsroom/the-earned-income-tax-credit-often-missed

4. www.irs.gov/pub/irs-pdf/p5075.pdf

5. www.nerdwallet.com/blog/taxes/americans-failing-basic-tax-knowledge/

6. www.irs.gov/pub/irs-pdf/n1015.pdf

7. s3.amazonaws.com/cfsi-innovation-files/wp-content/uploads/2017/05/26183930/2017-Employee-FinHealth.pdf