The Internal Revenue Service joined partners across the country in promoting the Earned Income Tax Credit on EITC Awareness Day on Friday.
January 29 marked the 10th anniversary of the EITC Awareness Day campaign, a nationwide effort to alert millions of low and moderate-income workers who may be missing out on this significant tax credit.
The IRS pointed out that millions of taxpayers who earned $53,267 or less last year may qualify for EITC for the first time in 2016. Local officials and community organizations nationwide are holding events on EITC Awareness Day highlighting this key benefit.
“One-third of the population eligible for EITC changes each year as their personal circumstances change,” said IRS Commissioner John Koskinen in a statement. “We want workers who may qualify for EITC for the first time to have all the information they need to get the EITC and get it right. This is an important credit for hard-working Americans, and one of the government’s best tools to fight poverty.”
Last year, more than 27.5 million eligible workers and families received almost $66.7 billion in EITC; with an average EITC amount of more than $2,400.
The IRS is encouraging taxpayers to use the EITC Assistant, an interactive tool on IRS.gov/eitc, to find out if they are eligible for the credit. The IRS website also provides helpful information on the health care law and how it may affect tax returns at IRS.gov/aca.
Workers, self-employed people and farmers who earned $53,267 or less last year could receive larger refunds if they qualify for the EITC. Eligible families with three or more qualifying children could get a maximum credit of up to $6,242. EITC for people without children could mean up to $503 added to their tax refund. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax.
Workers who are potentially eligible to claim the credit should visit IRS.gov/eitc to learn if they qualify and how to claim the credit. The IRS recommends that all workers who earned around $54,000 or less use the EITC Assistant to determine their filing status, if they have a qualifying child or children, if they qualify to receive the EITC and estimate the amount of the EITC they could get. If an individual doesn’t qualify for EITC, the Assistant explains why. A summary of the results can be printed and kept with the worker’s tax papers.
The IRS is also reminding taxpayers about the availability of myRA, a new, free, retirement savings account from the Treasury Department. Taxpayers who have a myRA account may use Free File to deposit their tax refund or a portion of their refund into their myRA account. They need to use Form 8888 or follow their software product’s instructions.