Q. A friend of mine who doesn't make much money needs help doing taxes. I recall hearing about some federal tax credit for low-income families and free help. Is there any information on this?

A. What you are referring to is the earned-income tax credit, and yes, there is help. The Volunteer Income Tax Assistance program, which includes assistance from several non-profit groups and is coordinated by Aloha United Way, is offering free help to taxpayers.

This aid will be available at more than 50 locations throughout the state at various times during the next few months. The first of the sites in a coalition will open on Jan. 20, according to Susan Tamanaha, AUW self-sufficiency initiative coordinator.

The easiest way to find the list of dates and locations where the help is available is to call the AUW's community information and referral service line by dialing 211. Ask where free tax services are located. If you have access to the Internet, go to www.hawaiitaxhelp.org.

You'll be hearing more about these services in coming weeks as the coalition makes announcements. Nationally, the Internal Revenue Service has declared Feb. 1 as National EITC Day to spotlight the tax credit and free tax-preparation services. It will come a day after the deadline for employers to give W-2 tax forms to workers.

Last year was the first time AUW helped pull together and promote information about the various sites, some of which are organized by AARP in Hawai'i. More than 1,500 local taxpayers filed returns, including the tax credit through the program. This year the group is expanding services to Moloka'i and hopes to operate more sites.

One of the coalition's missions is helping more people file for the earned-income tax credit locally.

Nationally it's estimated that 25 percent of people eligible for this credit, which can be worth up to $4,536 for a taxpayer with two or more children. To find out more, look at IRS Publication 596.

There are a number of qualifications for obtaining the credit, including an income cap of $38,348.

The coalition's rough calculations are that more than 27,000 Hawai'i residents eligible for the earned-income credit don't file for it. It estimates the average earned-income claim paid to Hawai'i residents at $1,632.

"We just want to start encouraging them to start filing," Tamanaha said.

Tamanaha said there is also an effort to disseminate other information about taxes, including educating residents about refund-anticipation loans, which provide almost instant access to money.

These are typically offered by tax preparers and are short-term loans that when calculated on an annual basis, carry interest rates of 97 percent or more.

Consumer advocates generally recommend people avoid refund-anticipation loans except for emergencies.

Another avenue for your friend is the "free file" program available through IRS.gov. Taxpayers who had $52,000 or less of adjusted gross income can use the free tax-preparation software available on the site and have their tax returns filed electronically.

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com