Rangel Highlights Earned Income Tax Credit (EITC) Awareness Day, Jan 27th

New York, NY – Today Congressman Charles Rangel encouraged his constituents to claim their Earned Income Tax Credit (EITC), which is a refundable federal income tax credit for low to moderate income working individuals and families. Under Rangel's leadership, Congress originally approved the tax credit legislation in 1975 -- and continued to expand it -- to offset the burden of social security taxes as well as to provide an incentive to work.  

“EITC has proven to be one of the most effective programs for transitioning from welfare to work and lifting more than 5 million workers and families each year out of poverty,” said Rangel. “Unfortunately, each year millions do not reap this program’s benefits because they simply do not know of its existence.  I want to make sure my constituents receive the tax credit they are entitled to.”

IRS estimates that as many as 25 percent of eligible taxpayers nationwide fail to claim the credit.  The EITC Awareness Day (January 27, 2012) is an annual outreach campaign aimed at helping millions of Americans by educating workers about the availability of the program.

"EITC is a financial boost for working people in a recovering economy and allows more funds to flow within our community.  It's money that can make lives a little easier," said Rangel. "Our local community also benefits from the additional funds received by the families."

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.

Added Rangel: "I encourage those in my Manhattan Congressional District and across America to see if they are eligible for EITC as they prepare for the upcoming tax season." 

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.

• 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 or 311 line for local services.

• 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. Hours and services offered vary by location and should be checked before visiting.

To help preparers, either volunteer or paid, accurately determine EITC eligibility and prepare returns, individuals should bring:

• Photo proof of identification
• Social Security cards for themselves, their spouse and all dependents or Social Security number verification letters issued by the Social Security Administration
• Birth dates for all persons listed on the tax return
• Wage and earning statement(s) Forms W-2, W-2G, and 1099-R, from all employers
• Interest and dividend statements from banks (Forms 1099)
• Copies of their prior year federal and state returns, if available
• Bank routing and account numbers for direct deposit of their refunds
• Other relevant information about income and expenses
• Amounts paid for day care, if applicable, and the day care provider's identifying number

Both spouses must be present to sign joint returns. Anyone paid to prepare federal income tax returns is required by law to sign the return and enter their Preparer Tax Identification Number.

 

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