Can you name one of the federal government’s largest and most overlooked benefit programs for working families and individuals?
One reason why the EITC is often overlooked is that in the past few years more Americans became eligible to claim it. The American Recovery and Reinvestment Act of 2009 created a new category of families with three or more children and increased the maximum benefit of EITC for tax years 2009 and 2010. The Tax Relief and Job Creation Act of 2010 extended this benefit through 2012.
“If you – or someone you know – are struggling financially during these tough economic times, the EITC can really make a difference,” said Diana Molina of M & M Financial Advisors in Plantation. “A number of factors can change eligibility for this credit, such as a change in earnings, the birth of a child, or a change in filing status. If you were ineligible to take advantage of this credit last year, that does not mean you are not eligible for tax year 2010.”
The EITC enables workers with three or more children to qualify for a maximum tax credit of $5,666 for tax year 2010. Workers without children may also be eligible but for a smaller dollar amount.
In order to qualify, workers must have earned $48,362 or less last year. Those claiming the EITC in tax year 2009 on average received a $2,200 tax credit.
Even if you are not otherwise required by law to file a tax return, you must do so if you want to claim this credit.
Moderate – to – low-income families or individuals can find out whether they qualify for the EITC by answering a few questions on the EITC Assistant page on the IRS website. They may file for free on www.irs.gov or receive free assistance in an IRS Tax Assistance Center.