Be aware of earned income tax credit
Friday is a special day. It's earned income tax credit awareness day.
It is a day to help spread the word about money workers already might have earned but might not know to claim.
The earned income tax credit is a federal tax credit for certain people who work but don't earn high incomes. People who earn a moderate income from wages, self-employment or farming might be eligible for the EITC.
A tax credit usually means more money in your pocket. Taxpayers who qualify and claim the credit could pay less federal taxes, pay no taxes or even receive money back as a refund.
According to the IRS, approximately 80 percent of eligible taxpayers claim the EITC. But that means 20 percent -- or one in five tax payers -- still miss out. This is money that can make a difference.
Last year, the credit returned more than $63 billion to more than 27 million workers across the country. In Kansas alone last year, 213,000 claims returned $475 million to eligible taxpayers, or an average of about $2,115.
There are millions of workers who miss the benefits of EITC each year either because they are newly qualified or don't otherwise need to file a tax return. One of the most common EITC errors was among people who were not eligible in the past, but might have had a change in job or family situation which made them eligible without them realizing it.
Could that be you and your family? Family changes such as job loss, reduction in income, or the birth of a child are things that might change EITC eligibility status.
Workers who qualify for EITC could receive larger refunds. It can mean up to $475 in tax credit for people without children, and up to $5,891 for those with three or more qualifying children.
The earned income tax credit varies by income, family size and filing status, so explore your eligibility or ask your tax preparer.
With the exception of some disability income, people must work to qualify for the EITC. There are special EITC rules for members of the military, ministers, other members of the clergy, and those impacted by disasters.
The earned income tax credit is a valuable, but complex, tax break for working families. Details about eligibility for EITC and other refundable tax credits are available at www.eitc.irs.gov or ask your tax preparer for help.
When filing for the EITC, avoid the four most common errors:
1. Claiming a child who does not meet the criteria as a qualifying child.
2. Married taxpayers who incorrectly file as single or head of household.
3. Misreporting income.
4. Incorrect Social Security numbers.
The earned income tax credit is a financial boost for working people and their families, and it returns money to the local economy. It is money that can make lives a little easier.
Check whether you qualify for the EITC this tax season.
Linda Beech is a Kansas State University Research & Extension agent in Ellis County specializing in family and consumer sciences.