Earned Income Tax Credit
It's easier than ever to find out if you qualify for EITC.
The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EITC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance of Needy Families (TANF) payments.
The Earned Income Tax Credit (EITC) is a refundable credit for people who work but did not earn high incomes. The EITC is a valuable tool helping eligible taxpayers lower their taxes or receive refunds. The IRS wants all eligible taxpayers to take the credit they deserve.
Created in 1975, EITC helps offset Social Security taxes and provides an incentive for work. It is the federal government’s largest benefits program for working families. More then 22.4 million taxpayers received more $43.7 billion in EITC on their 2006 federal tax returns. It is estimated in Washington State that $81 million in EITC tax credit are left behind and not claimed each year. Don’t miss out. It is your money, come and get it. More than 60 percent of all tax returns claiming EITC are filed during February.
In spite of extensive awareness campaigns by IRS and its partners, the agency estimates that 20 percent more taxpayers may be eligible, but may not be aware of and claim their EITC. This includes people with limited English proficiency, rural residents, Native Americans, people with disabilities and nontraditional families, such as a grandparent raising a grandchild.
There are more than 12,000 free tax preparation sites nationwide. In Cowlitz County, the AARP Tax Aided program provides free tax filing assistance to individuals, families, and seniors. There are several convenient locations with day, evening and free filing available. Filers with a checking or savings account may have their returns in 6 – 10 days. Call 2-1-1 for updated locations, dates, and times.
Taxpayers who qualify for EITC also can get help through IRS’s Free File program (www.icanfile.org?caller=559), which offers free electronic filing for do-it-yourselfers with internet access. Taxpayers are encouraged to split their refunds into two or three accounts by sending part of their refund to checking and part to future savings.