Families urged to apply for Earned Income Tax Credit

The Internal Revenue Service and community partners nationwide recently launched an outreach campaign aimed at helping millions of Americans who earned $49,078 or less take advantage of the Earned Income Tax Credit (EITC).

Local officials and community organizations across the nation are highlighting the benefits of this key work incentive for low-and moderate-income workers and working families.

The outreach campaign is necessary because one-third of the eligible population changes annually as their financial, marital and parental statuses change. Although an estimated four out of five eligible workers and families get the credit, one in five still miss out on it, either because they don’t claim it, or don’t file a return at all.

"The EITC provides a financial boost for millions of hard-working Americans. But people can easily overlook this important credit, especially if their financial situation has changed. The IRS reminds taxpayers to look into this valuable credit to see if they qualify,” said IRS Commissioner Doug Shulman.

The EITC varies by income, family size and filing status. People can see if they qualify by visiting IRS.gov and answering a few questions using the EITC Assistant . In tax year 2010, almost 26.8 million eligible workers and families received over $59.5 billion total in EITC. The average EITC amount last year was around $2,200.

Workers who earned $49,078 or less from wages, self-employment or farm income last year could receive larger refunds if they qualify for the EITC. That could mean up to $464 in EITC for people without children, and a maximum credit of up to $5,751 for those with three or more qualifying children. Unlike most deductions and credits, the EITC is refundable. In other words, eligible people may get a refund from the IRS even if they owe no tax.

More information on EITC and detailed eligibility rules are available at www.irs.gov/eitc .

How to claim the EITC

To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit. Those eligible for the EITC have free options to file a tax return to claim the credit:

· Free File on IRS.gov Free brand-name tax software walks people through a question and answer format to help them prepare their returns and claim every credit and deduction for which they are eligible. The program also allows people to file electronically for free, giving them access to all their money often in as little as ten days. Everyone can use Free File, the free way to prepare and e-file federal taxes either through brand-name software or online fillable forms. Individuals or families with 2011 adjusted gross incomes of $57,000 or less can use Free File software. Free File Fillable Forms, the electronic version of IRS paper forms, has no income restrictions. For either service, taxpayers must go through www.irs.gov/freefile to access the programs.

· IRS Taxpayer Assistance Centers EITC-eligible workers can seek free assistance in IRS locations across the country. Locations are listed online at www.IRS.gov under "Contact IRS." Hours and services offered vary by location; taxpayers should check before visiting a TAC for tax preparation services.

· Free tax preparation sites EITC-eligible workers can seek free tax preparation at more than 12,000 Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest VITA site, people can call the IRS at 800-906-9887. Taxpayers can also find VITA/TCE sites by calling their community’s 211 line for local services.

The IRS Volunteer Income Tax Assistance (VITA) Program offers free tax help generally to people who earn $50,000 and less. The Tax Counseling for the Elderly (TCE) Program offers free tax help to taxpayers who are 60 and older. Many sites have multilingual volunteers who can assist people with limited English skills. In addition to free tax return preparation assistance, most sites use free electronic filing. The IRS can generally issue refunds in as few as 10 days to taxpayers who combine e-file and direct deposit.

Taxpayers need to present the following items to have returns prepared at a TAC or a volunteer site:

· Photo identification

· Valid Social Security cards for the taxpayer, spouse and dependents

· Birth dates for primary, secondary and dependents on the tax return

· Wage and earning statement(s) Form W-2, W-2G, 1099-R, from all employers

· Interest and dividend statements from banks (Forms 1099)

· A copy of last year’s federal and state returns, if available

· Bank routing and account numbers for direct deposit

· Other relevant information about income and expenses

· Total paid for day care and the day care provider's identifying number

To file taxes electronically on a joint tax return, both spouses must be present to sign the required forms.

The military also partners with the IRS to provide free tax assistance to military personnel and their families. The Armed Forces Tax Council (AFTC) consists of the tax program coordinators for the Army, Air Force, Navy, Marine Corps and Coast Guard. The AFTC oversees the operation of the military tax programs worldwide, and serves as the main conduit for outreach by the IRS to military personnel and their families. Volunteers are trained and equipped to address military specific tax issues, such as combat zone tax benefits and the effect of the EITC guidelines.

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