With April 15 fast approaching, one thing to keep on your radar is the earned income tax credit , or EITC, a credit available for workers whose earned income does not exceed certain limits.
The amount of the EITC a taxpayer receives depends on that person’s self-employment or wage income amount, marital status, and number of qualifying children, if any. For example, for 2018, a couple filing a joint return who have two qualifying children, and who earn less than $51,492, are entitled to an EITC of up to $5,716. And this is a refundable credit, meaning taxpayers receive a check for the full credit amount even if they owe no federal income tax. But to receive the EITC, a taxpayer must file a tax return.
Nationwide, for the 2018 tax year, the IRS estimates that 25 million eligible workers and families will receive about $63 billion in EITC. The average amount of EITC received nationwide will be about $2,488. In Idaho alone, 124,000 applicants will receive a total of $288 million. The average amount per claim will be $2,332.
Not surprisingly, the EITC greatly reduces poverty for working families. Working-family tax credits lifted 9.4 million people out of poverty in 2013.
Yet one in five eligible workers never claims the EITC. According to the IRS, workers at risk for overlooking this important credit include:
▪ People living in nontraditional homes, such as a grandparent raising a grandchild.
▪ Those without children.
▪ Individuals with limited English skills.
▪ Those living in rural areas.
▪ Native Americans.
▪ People with earnings below the filing requirement.
You could be one of the many individuals missing out on this opportunity to alleviate financial burdens. But you must file a tax return to claim the credit.
Millions of workers will qualify for the EITC for the first time for 2018. Workers move into and out of eligibility based on changes in their marital, parental and financial status. If you make less than $54,884, check to see if the EITC is something you can benefit from. You can determine your eligibility by using the online EITC Assistant at www.IRS.gov. You can also file your return and claim your credit for free using community tax-assistance sites or free brand-name software products through IRS’ Free File program, also online at.
Abby McCleery is a student at the University of Idaho College of Law and participate in the school’s Legal Aid Tax Clinic. Emailor call the Legal Aid Clinic at 208-364-6166.