Earned Income Tax Credit can really add upPublished 10:37pm Saturday, January 1, 2011
You could be cheating yourself at tax time, even if you are not required to file a tax return.
The IRS estimates one in four taxpayers will overlook the Earned Income Tax Credit – or EITC – worth up to $5,600 or more this year.
EITC is a refundable tax credit, meaning you can get money back even if you owe no federal income tax or had tax withheld. And, if you owe tax, it can offset the amount you must pay.
The credit has been making lives of working people a little easier for over 35 years. Yet it remains little known, possible because people move into and out of eligibility as their income, marital status and parental statuses change.
Unlike other tax credits, EITC is based on a combination of factors such as source and amount of your income, or combined income if married, whether you have qualifying children and how many.
Although children are not required for eligibility, they increase the amount of your credit. Through new legislation, families with three or more children can get even more money.
No-cost income tax help is available in the River Cities. Volunteer income tax assistance (VITA) sites will compute your EITC and prepare your return at no charge. To locate a VITA site near you, please visit the United Way of the River Cities web site (www.UWRC.org) or call 304-523-8929 x 6.
Remember, if you are eligible, you must file a federal income tax return, even if you are not otherwise required to file, and you must specifically claim credit to get it. According to the IRS, rural and non-traditional families, such as grandparents raising grandchildren, are among those who most frequently overlook the credit. Today, more than ever, hard-working individuals and families can use a little extra help.
Ed Davis is the Financial Stability Partnership Coordinator for the United Way of the River Cities. He can be reached at 820 Madison Ave., Huntington, WV 25704 or by phone at 304-523-8929 ext. 6.