They've earned the money, but they're not getting it.

Every year around tax time, hundreds of low- and moderate-income Cincinnatians leave money - about $13.4 million - unclaimed with the federal government.

They fail to claim federal "earned income tax credits," which are designed to help many working families make ends meet.

Some of these taxpayers just assume they're not entitled to refunds; others don't know what the credit is.

This year, cities such as Cincinnati are getting smart about helping people get their due.

The city, community groups and major corporations including Kroger and Procter & Gamble recently launched a citywide push to provide free tax preparation services and help families get the tax credit.

Local leaders such as Councilman David Pepper figure millions of federal dollars flowing back into residents' pockets will flow back into the local economy.

Depending on a family's income, an earned income credit could reach $4,140.

Volunteers will even help file revised tax forms covering the past several years to help people recoup unclaimed refunds.

Who's eligible?

• Taxpayers with two or more children, earning less than $33,178 (or, if married and filing jointly, $34,178) a year.

• Taxpayers with one child, earning less than $29, 201 (or $30,201 if married filing jointly) a year.

• Taxpayers without children, earning less than $11,060 (or $12,060 if married filing jointly) a year.

Making work pay

Congress created the earned income tax credit in 1975 to help people weather recessions and shoulder the Social Security payroll tax.

Now the tax credit is a tool to lure families from welfare to work. Last year Congress expanded its eligibility.

"Far too many Americans are trying to support families on jobs that don't pay enough to make ends meet," says Bruce Katz, vice president of the Brookings Institution.

"The federal government uses the tax code to augment their earnings. ... (It) makes work pay, and in so doing lifts nearly 5 million out of poverty every year.''

Not so fast. Last month the Bush administration proposed new "anti-fraud" measures in a 2004 budget proposal that would require more paper proof from families seeking the earned income tax credit.

Meanwhile, 17.2 million households nationwide qualified last year for the tax credit, but 12.9 million claimed it - leaving $2.7 billion on the table.

I doubt high-income tax filers left as much free money for the feds.

They have tax attorneys and CPAs making sure that doesn't happen.

Poor working stiffs, at best, have temporary tax-filing firms that open and close in their neighborhoods during tax season.

These places help customers file for the earned income tax credit, but they take a sizeable chunk of it in hefty tax preparation fees and high-interest, short-term loans they call "rapid refunds."

The IRS helps these tax preparers reduce their risk by giving them access to otherwise unavailable consumer information.

Still the lenders charge the equivalent of 250 percent annual interest, the institute says.

Why not simplify it? The IRS publication explaining the earned income tax credit is 55 pages long. Many families who qualify for it also qualify for the child tax credit, which has its own set of rules. Why not combine both?

The bottom line: Three out of four Cincinnatians who got the tax credit last year spent much of it on tax preparers. This year they don't have to.

For free tax help call 211.

E-mail damos@enquirer.com or phone 768-8395.