EIC Worth Thousands to Low-income Households Says LSU AgCenter Family Resource Management Expert

Ann A. Berry  |  4/19/2005 10:28:31 PM

News You Can Use For April 2004

If you worked last year, even part time, and earned a low income, the Internal Revenue Service could owe you money, according to LSU AgCenter family resource management professor Dr. Ann Berry. For the 2002 tax year, 516,541 Louisiana families received more than $1 billion dollars.

If you earned less than $33,692 in 2003 and have two or more children, you can receive up to $4,204. If you earned less than $29,666 and have one child, you can receive up to $2,547. Even if you don’t have children and earned less than $11,230, you can get up to $382. If you are married, the income limits are $1,000 higher in each situation.

This refund is called the Earned Income Credit (EIC), sometimes called Earned Income Tax Credit (EITC) and is designed to reward low-income persons, Berry explains.

To get your credit, you must file a federal tax return. If you have children, include Form 1040 or 1040A and Form EIC. The EIC form is not needed if you don’t have children. When you file for the credit, it is important that you list correct Social Security numbers for you and your children. If errors are made, your payment could be delayed.

If you qualify, you will either owe less in taxes, or get a check back from the IRS. You can even get the credit if you owe no income tax. The EIC will not affect most benefits such as food stamps, Social Security Income (SSI), Medicaid or public housing. Types of income that count for the EIC include salaries, wages, military pay, long-term disability payments, strike benefits, 401K contributions and cafeteria plan contributions.

"Many workers do not realize that they can get free help filling out tax forms," Berry says, pointing out that Volunteer Income Tax Assistance (VITA) trained volunteers in many communities will complete your forms at no charge.

VITA sites are open through April 15. Many sites have electronic filing for faster refunds. To find the VITA site near you, call 1-800-829-1040. Berry advises to be patient, since the 24-hour line is often busy.

If you are able to access a computer with Internet access, you can file electronically through the IRS Web site, www.irs.gov. Electronic filing usually results in a refund in seven to 10 days.

Many immigrants are eligible for the EIC, including green card holders, refugees and others legally authorized to work. To claim the EIC, you, your spouse and any child claimed for the EIC must have a valid Social Security number (SSN).

The EIC Advance Payment option allows some workers who are raising children to get part of their EIC in their paychecks throughout the year and part in a check from the IRS after they file their tax return. A worker can get up to $58 extra in each bi-weekly paycheck. To get EIC Advance Payments, complete Form W-5 from your employer.

For information on related family and consumer topics, visit the FCS Web site at http://www.lsuagcenter.com/Inst/Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.

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On the Internet: LSU AgCenter FCS: http://www.lsuagcenter.com/Inst/Extension/Departments/fcs/
Source: Ann Berry (225) 578-2633, or aberry@agcenter.lsu.edu

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