One in Five Taxpayers Qualify For This Tax Credit…
Today’s to-do list: Learn something new. And, maybe, earn something new.
It’s EITC Awareness Day – a day meant to make sure the millions of taxpayers who are eligible for the Earned Income Tax Credit actually take advantage of it when they’re filing or getting ready to file their tax returns.
Millions of workers earning less than $53,505 qualify for the credit. In fact, the IRS recently revealed that one in five taxpayers is eligible for the credit – but that 20 percent of those eligible taxpayers don’t claim it.
So, in honor of EITC Awareness Day, we’re breaking down this credit, its benefits, and who qualifies to receive it.
What is EITC / EIC?
The EITC or EIC (used interchangeably) is a refundable tax credit. This means that if your credit amount is more than the taxes you owe, you’ll get the extra back in your refund from the IRS.
Clearly, this credit is worth the time and effort to see if you qualify.
Key Facts on EITC / EIC
The IRS estimates that four out of five eligible taxpayers claim and get the EITC.
The average EITC credit amount is $311 (According to the IRS Stats for 2014, the IRS had total EITCs of $1,387,000,000 spread out amongst 4,465,000 returns. [$1,387,000 ÷ 4,465,000 = $310.64].
The EITC, combined with the Child Tax Credit (CTC)/Additional Child Tax Credit (ACTC), is a financial boost for working people and your local economy.
Do You Qualify for EIC / EITC?
You may qualify for the EITC if:
- You have earned income and adjusted gross income within certain limits.
- You, your spouse and any qualifying child you list on your tax return each has a Social Security Number that is valid for employment.
- Your filing status is single married filing jointly, head of household, or qualifying widow(er). You can’t claim the credit if your filing status is married filing separately.
There are millions of workers who miss out on refundable tax credits each year because they simply don’t know about the credits or don’t have the right tax guidance. A tax professional at H&R Block will be able to help you learn more about the EITC and see whether you qualify.
Find an office near you now, or learn more about e-filing your tax return for free!
(Image credit: IRS)