IRS: Don’t Forget Your Earned Income Tax Credit (EITC)

The Internal Revenue Service has launched its annual outreach campaign to educate those millions of American who earned  $49,078 or less in 2011 and can qualify for the Earned Income Tax Credit (EITC).
The campaign is necessary because one-third of the eligible population changes annually as their financial, marital and parental statuses change, the IRS said.
Although an estimated four out of five eligible workers and families get the credit – that leaves one in five that either don’t claim it, or don’t file a return at all.
“The EITC provides a financial boost for millions of hard-working Americans,” said IRS Commissioner Doug Shulman in a statement. “But people can easily overlook this important credit, especially if their financial situation has changed. The IRS reminds taxpayers to look into this valuable credit to see if they qualify.”
The EITC varies by income, family size and filing status.
You can determine if you qualify by visiting IRS.gov and answering a few questions using the EITC Assistant.
In tax year 2010, almost 26.8 million eligible workers and families received over $59.5 billion total in EITC. The average EITC amount last year was about $2,200.
Workers who earned $49,078 or less from wages, self-employment or farm income last year could receive larger refunds if they qualify for the EITC.
That could mean up to $464 in EITC for those without children, and a maximum credit of up to $5,751 for those with three or more qualifying children.
Unlike most deductions and credits, the EITC is refundable – eligible people may get a refund from the IRS even if they owe no tax.
To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit.
The IRS said those eligible for the EITC have free options to file a tax return and claim the credit:

  • Free File on IRS.gov: Free brand-name tax software walks people through a question and answer format to help prepare their returns and claim every credit and deduction for which they are eligible. The program also allows people to file electronically for free, giving them access to all their money often in as little as ten days.
  • Free tax preparation sites: EITC-eligible workers can seek free tax preparation at more than 12,000 Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest VITA site, people can call the IRS at 800-906-9887. Taxpayers can also find VITA/TCE sites by calling their community’s 211 or 311 line for local services.
  • IRS Taxpayer Assistance Centers: EITC-eligible workers can seek free assistance in IRS locations across the country. Locations are listed online at www.IRS.gov. Hours and services offered vary by location and should be checked before visiting.

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