As the recession continues its ravages and many families struggle to make ends meet, the Internal Revenue Service is making it even easier this year for taxpayers to find out whether they qualify for the earned income tax credit.
Created 34 years ago as a way to offset Social Security taxes and provide job incentives, the EITC provided $44 billion in refunds to 22.4 million families in 2006.
It works simply: If the earned income tax credit exceeds the amount of taxes owed, the tax filer gets a refund for the difference.
The amount of the credit varies, but generally is determined by income and family size. The only real problem: too few people who are eligible for the credit claim it.
To help identify those who are eligible, the IRS has set up a EITC qualifier calculator (in both English and Spanish) on its Web site www.irs.gov.
Using interactive menus that ask questions and provide information using pop-up windows, the calculators can determine who is eligible, what their earned income tax credit might be, and how to fill out Schedule EIC, which is attached to either forms 1040A or 1040, that lets a taxpayer claim the EITC.
This year, the earned income tax credit applies to singles earning less than $12,880 or married couples (filing jointly) earning less than $15,880 with no qualifying children; singles earning less than $33,995 or couples (filing jointly) earning less than $36,995 with one qualifying child, or singles earning less than $38,646 or couples (filing jointly) earning less than $41,646 with two or more qualifying children.
The tax credits limits that can be claimed this year are $4,824 (up from $4,716) with two or more qualifying children; $2,917 (up from $2,853) with one qualifying child, and $438 (up from $428) with no qualifying children.
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.