Do You Qualify for Money Back through the EITC?

Business AdvisorJanuary 25, 2019, marked the 13th annual Earned Income Tax Credit (EITC) Awareness Day. It was a national effort to alert workers about EITC. It also featured free tax preparation sites.

Why it’s important

In 2017, 27 million workers got more than $65 billion in EITC refunds. In California that same year, 2.9 million workers got more than $6.8 billion in EITC refunds.

The IRS believes four out of every five taxpayers qualify for the EITC. Also, the EITC provides a fiscal boost when combined with the child tax credit (CTC).

These working-family tax credits lifted 5.8 million people out of poverty in 2016. This included 3 million children. The tax credits also reduced the burden for some 18.7 million needy people.

Do you qualify?

EITC varies by income. Family size and filing status also play a role. To get credit, you must have earned income. This means you must have income from either working for someone or for yourself. You can also have certain disability income.

EITC can mean thousands of refund dollars when filing a return with children who can qualify you to receive the CTC credit. The norm is about $2,400 that EITC adds to refunds. If you don’t have a child who qualifies you to receive the CTC credit, you may still be able to receive a smaller credit.

Simple process

Trained volunteers will ask questions to see if you qualify for the EITC and other tax credit refunds. Helpers at the Volunteer Income Tax Assistance (VITA) sites will also prepare and e-file tax returns at no cost to you.

To find a site that can help you prepare your taxes for free, visit IRS.gov Locator Tools. You can also call 211 or 311.

You should bring the items listed below to be sure you get the right amount of credit you deserve:

  • A valid driver’s license or other photo ID.
  • Social Security cards. Or, a Social Security letter as evidence for all persons listed on the return.
  • Birth dates for all persons listed on the return.
  • All income statements:
    • Forms W-2 and 1099.
    • Social Security.
    • Unemployment.
    • Other statements like pensions, stocks, interest, and any other proof showing taxes withheld.
  • All records of costs that include:
    • Tuition.
    • Mortgage interest.
    • Real estate taxes.
  • Copies of last year’s state and federal tax returns.
  • Bank routing and account numbers.
  • Dependent child care information:
    • Name and address of who you paid.
    • Caretaker’s Social Security number other tax ID number.
  • Form 1095-A. The Health Insurance Marketplace Statement if you purchased coverage through the Health Insurance Marketplace.
  • Both spouses. Both are needed to sign forms to e-file a joint tax return.

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Jamey Mann