January 27 is Earned Income Tax Credit Awareness Day
Millions of workers could overlook a special federal tax credit because they don't know about it. As a result, they could miss out on up to $5,751 extra in their federal income tax refunds through the Earned Income Tax Credit, or EITC. Last year, on average, the credit boosted refunds for eligible workers by $2,100.
Anyone earning $49,078 or less from wages, self-employment or farming in 2011 should see if they qualify. Eligible worker must file federal income tax returns-even if they are not required to file-and specifically must claim the credit to get it.
Many people will qualify for the first time this year due to economic changes in their income or changes in their marital or parental statuses according to the IRS. The agency estimates four out of five eligible workers currently claim their EITC.
Workers can get free help determining their EITC eligibility and claiming the credit. Many communities have volunteer income tax assistance sites. Residents can locate a site by calling their community's 211 or 311 number for local services or the IRS at 1-800-906-9887.
To help preparers, either volunteer or paid, accurately determine EITC eligibility and prepare returns, individuals should bring opr have available:
- 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.
Another resource available to help you claim your EITC is I-CAN!® E-File. I-CAN!® E-File is an online service from the Legal Aid Society of Orange County, California that can help you prepare and E-File your taxes. Just answer simple questions on each screen and I-CAN!® E-File will complete your tax return.
When you prepare your federal return, I-CAN!® E-File can also help you prepare your state return if you lived and worked all year in Pennsylvania or one of other the following states: California, Michigan, Montana, New York (I-CAN!® does not e-file New York forms). I-CAN!® E-File also supports Alaskan resident's dividends. You can always print and E-File your state return for FREE along with your federal return.
Visit www.icanefile.org to get started and enjoy this fast and easy way to get your taxes done and claim your Earned Income Tax Credi.