EITC Awareness Day: Workers May Qualify for Significant Tax Benefit

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PHOENIX - - The Internal Revenue Service today joined partners across the country in promoting the Earned Income Tax Credit (EITC) on EITC Awareness Day, Friday, Jan. 27, 2017. This campaign, which started 11 years ago, is a nationwide effort to alert millions of low and moderate income workers who may be missing out on this significant tax credit.

Millions of taxpayers who earned $53,505 or less last year may qualify for the EITC for the first time in 2017, making awareness critical. Local officials and community organizations nationwide are holding events on EITC Awareness Day highlighting this key benefit.

GǣThe EITC is an important anti-poverty tax credit that helps millions of people every year,Gǥ said IRS Commissioner John Koskinen. GǣEven though four out of five eligible workers and families benefit from the EITC, millions more miss out because they don't know about it or don't realize they're eligible. We encourage people to look into whether they qualify.Gǥ

Workers, self-employed people and farmers who earned $53,505 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 $6,269. EITC for people without children could mean up to $506 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. Last year, more than 27 million eligible workers and families received almost $67 billion in EITC; with an average EITC amount of more than $2,455.

The IRS recommends that all workers who earned $53,505 or less learn about EITC eligibility and use the EITC Assistant tool to find out if they qualify. The tool will help them 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 credit 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 reminds taxpayers to be sure they have valid Social Security numbers in hand for themselves, as well as for each qualifying child, before they file their return. Moreover, to get the EITC on a 2016 return, they must get these SSNs before the tax-filing deadline (April 18, 2017, for most people or Oct. 16, 2017, for those who get extensions).

How to Claim the EITC
To get the EITC, workers must file a tax return and specifically claim the credit. Free tax preparation help is available online and through a nearby volunteer organization. Those eligible for the EITC have these options:
-+ Free File on IRS.gov. Free brand-name tax software walks people through a question and answer format to help them prepare their returns and claim every credit and deduction for which they are eligible. Free File also provides online versions of IRS paper forms, an option called Free File Fillable Forms, best suited for taxpayers comfortable preparing their own returns.

-+ Free tax preparation sites. EITC-eligible workers can seek free tax preparation at thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, use the search tool on IRS.gov or the IRS2go smartphone application.

Refunds
A new law approved by Congress requires the IRS to hold refunds claiming the EITC and the Additional Child Tax Credit (ACTC) until Feb. 15. By law, the IRS must hold the entire refund, even the portion not associated with EITC or ACTC. This change helps ensure taxpayers receive the refund they are owed by giving the agency more time to help detect and prevent fraud.

Even so, taxpayers can still get their refunds sooner by choosing direct deposit. The IRS will begin releasing these refunds on Feb. 15, but taxpayers should not expect to see them deposited into their bank accounts until the week of Feb. 27, assuming there are no processing issues with the tax return.

Where's My Refund? G