Earned Income Tax Credit

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This is Kim Lawson.  I’m talking with Verlinda Paul about the EITC.

Verlinda, what is EITC?

EITC stands for Earned Income Tax Credit. This is a refundable credit, meaning qualifying taxpayers can receive refunds even if they had no tax withheld.

EITC can be a financial boost for working people hit by hard economic times – including struggling self-employed taxpayers and lower-paid employees. It can put up to $5,600 or more in their pockets and help make life a little easier in these hard times.

Who qualifies for this credit?

Individuals with earnings from wages – like employees and small business owners – from self-employment, even earnings from farming.

Eligibility depends on several factors, such as the amount of your earned income, your marital status, whether or not you have children and how many children, your age and so forth.

Although you or your employees may not have qualified before, if your financial, marital or parental status changed this year and you earned less than $48,000, see if you qualify. It’s too much money to leave on the table.

Where can people get help if they need it?

Use the online EITC Assistant at IRS.gov to see if you qualify.

You can also get free help at a volunteer assistance site. Locate these sites through your community’s 211 or 311 telephone numbers or call the IRS at 1-800-906-9887.

Your local IRS Taxpayer Assistance Center is another option.

And  those “Do-it-yourselfers” can file electronically using Free File on IRS.gov and the software will compute the amount of their credit.

What do viewers need to know about this credit?

If you are eligible, you must file a federal tax return -- even if you’re not otherwise required to file – and specifically claim the credit to get it.

Some states have a similar tax credit, increasing the dollars you may be eligible to receive.

EITC is one of the most valuable tax credits for working taxpayers; it’s also one of the most overlooked. We estimate that one in four eligible taxpayers miss out because they don’t check it out.

EITC has been making the lives of working people a little easier, and lifting people out of poverty, for 35 years.

Is there anything employers can do to help their employees?

Absolutely! Please alert your workers about this valuable credit.

We have a special Web page with resources and communication tools just for employers. Just go to www.irs.gov and type EITC into the search box.

Thank you, Verlinda.  I’ve been talking with Verlinda Paul of the IRS. This is Kim Lawson.