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Are You Giving Away Money By Not Claiming The Earned Income Tax Credit?

Working Americans with annual earnings under $38,300 may be eligible for a rebate of up to $4,500 if they qualify for the Earned Income Tax Credit (EITC). The EITC provides tax rebates worth hundreds or even thousands of dollars, depending on the size of the household and the amount of taxes paid in the previous year. Every year, $6-12 billion dollars in tax refunds go unclaimed. One out of every 5 taxpayers who qualifies for the EITC fails to file taxes and claim the credit, essentially giving money that belongs to them back to the government.

The EITC provides a tax refund for working Americans by returning some of the money they have paid in federal or state income taxes. The EITC is a tax credit rather than a tax deduction, so it does not simply reduce the amount of taxes owed; it actually puts money into the hands of eligible taxpayers through direct deposit or a rebate check.

The Earned Income Tax Credit can play a significant role in improving an individual or family's standard of living, especially when it is used for long-term wealth building strategies like investing in education or paying down debt.

AM I ELIGIBLE FOR THE EITC?

You may be eligible for the EITC if:

  1. You paid taxes in the previous tax year and
  2. Your total income in 2006 was not more than:
  • $36,348 ($38,348 married filing jointly) with two or more qualifying children;
  • $32,001 ($34,001 married filing jointly) with one qualifying child;
  • $12,120 ($14,120 married filing jointly) with no qualifying children.

To verify that you are eligible to claim the EITC visit the IRS website at: www.irs.gov

You can also take advantage of free tax preparation assistance offered to low and moderate-income taxpayers through the IRS Volunteer Income Tax Assistance (VITA) program. Call 1-800-829-1040 to see if there is a VITA site near you.

TAKE ACTION!

  • If you are eligible, file your taxes by April 15th and claim the Earned Income Tax Credit.
  • If you know others who are eligible, encourage them to claim the EITC as well.
  • Consider using your EITC credit in a way that builds your long term wealth by paying down debt, investing in education and/or saving to purchase a house.

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