You work. Why not let the EITC work for you?
Did you know that you might have extra money waiting for you this tax season? For the last 40 years, the Earned Income Tax Credit (EITC) has made life better for millions of workers. Last year, more than 27 million eligible workers and families received more than $67 billion from the EITC, with an average credit of about $2,455. Yet the IRS estimates that one in five taxpayers misses this credit entirely.
Choose not to be among the 20 percent who miss out on this credit each year. If you or someone you know earned less than $53,267, you may already qualify without knowing it. Use the EITC Assistant, available later this month, to answer questions about yourself and other family members and see if you qualify. The assistant will even estimate the amount of your credit.
It’s important to remember that workers move in and out of eligibility based on changes in marital, parental, and financial status. EITC eligibility depends on several factors, including income and family size. If you qualify and claim the credit, it could be as much as $6,242 from the IRS!
Better still, if you qualify for the federal EITC, you may be eligible for a similar credit from your state or local government. Twenty-five states, plus local municipalities including the District of Columbia and New York City, offer residents an earned income tax credit for 2016.
It’s easy to find free tax help to prepare and file your taxes. Here are three free and easy ways to determine your eligibility for, file, and claim your EITC:
- Use the online EITC Assistant at IRS.gov to help you determine if you are eligible. The 2016 tax year versions in both English and Spanish will be available later this month.
- If you make $54,000 a year or less, you can access free tax return preparation services available at more than 13,000 community volunteer tax assistance (or VITA) sites.
- You can use brand name software products through IRS’s Free File and electronically file your return to claim your EITC. Visit IRS.gov to access the software.
- The IRS works with national partners, community-based coalitions, and thousands of local partners and governments. These partnerships provide free EITC tax return preparation and tax help and tax education.
Want to get ahead of your savings goals? We encourage you to dedicate your refund, or at least part of it, to savings. Enter the SaveYourRefund promotion with $35,000 in cash prizes and 101 chances to win simply for saving a portion of your refund. For more information and how to commit to saving prior to filing your return, visit saveyourrefund.com.
This Friday, the IRS will celebrate its 11th annual EITC Awareness Day. Celebrate by finding out if you or your family qualify for the EITC. And if you aren’t sure what to do with that extra cash, let America Saves help! Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. America Saves will keep you motivated with information, tips, and reminders to help you reach your savings goal. Think of us as your own personal support system.
- Written by Tammy G. Bruzon
- Category: Blog
- Published: 26 January 2017