Ann A. Berry | 4/21/2005 9:28:53 PM
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.
The Earned Income Tax Credit is a refundable federal tax credit for eligible individuals and families who work and have earned income under $34,458 ($35,458 for married, filing jointly). The EITC reduces the amount of tax you owe, and it may even give you a refund!
Berry says the EITC is the largest cash transfer program for low-income parents in the United States. When it was first introduced in 1975, the maximum value was $400 per family. Today, qualifying families can receive up to $4,200.
More than 20 million working families and individuals received the EITC in 2003, claiming more than $36 billion. In Louisiana 500,000 families and individuals claimed this credit, receiving more than $1 billion. Research shows, however, that 15 percent to 20 percent of those who are eligible each year fail to claim this credit. The IRS estimates that more than $81 million in eligible EITC refunds went unclaimed in Louisiana for the past tax year.
Berry says you may qualify for the EITC if you have a valid Social Security number, you are a U.S. citizen or resident alien and your salary is less than the following: $11,490 (or $12,490 if married and filing jointly) with no children, $30,338 (or $31,338 if married and filing jointly) with one child, $34,458 (or $35,458 if married and filing jointly) with two or more children.
Qualifying children include son, daughter, adopted child, grandchild, great-grandchild, stepchild or eligible foster child. An eligible foster child is one who lived with you in the United States for more than half of the tax year and by the end of the tax year was under age 19, or under age 24 and a full-time student or permanently and totally disabled at any age during the year.
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.
The EITC will not affect most benefits such as food stamps, Social Security Income (SSI), Medicaid or public housing. Types of income that count for the EITC include salaries, wages, military pay, long-term disability payments, strike benefits, 401K contributions and cafeteria plan contributions.
Berry says workers do not realize that they can get free help filling out tax forms. Volunteer Income Tax Assistance trained volunteers are in many communities and may even complete your forms at no charge. VITA sites are open from late January through April 15. Many sites have electronic filing for faster refunds. To find the VITA site near you, call 1-800-829-1040. Be patient—the 24-hour line is often busy.
An accurate tax form mailed early in the tax season should bring a refund in the mail within a few weeks. 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 just seven to 10 days.
For information on related family and consumer topics in family, housing and nutrition, visit the FCS Web site at www.lsuagcenter.com/Inst/
Extension/Departments/fcs/. For local information and educational programs, contact an extension agent in your parish LSU AgCenter office.