The earned income tax credit is often overlooked by taxpayers who did not earn a significant salary the previous year, but lower wage earners can benefit.
Almost 40,000 out of 209,000 eligible Philadelphians didn’t apply for the Earned Income Tax Credit on their federal income tax returns last year. And with each credit averaging about $2,400 for eligible filers, Philadelphia Department of Revenue Commissioner Frank Breslin is making sure the city is doing what it can to educate residents about the EITC and make it easier for them to apply for the credit on their federal tax return.
The Earned Income Tax Credit (EITC) is a valuable tool for lower-income taxpayers, and it can result in a refund that's even larger than the taxes you paid.
Tax credits mystify many Americans, if only because it's hard to know which ones they qualify for and why. They're worth having because they provide meaningful savings on a filer’s overall tax contribution and in some cases lead to a tax refund.
You may have not have heard of the Earned Income Tax Credit, but it may help you get a tax refund of thousands of dollars from the Internal Revenue Service.
The EITC payout ranges from $503 for a single individual with no children up to $6242 for a person with three or more qualifying children.
The Earned Income Tax Credit (EIC or EITC) is a refundable credit for workers who earn low or moderate incomes. This credit is meant to supplement the income you have earned through working, whether for yourself (self-employed) or for someone else. If you qualify for the Earned Income Tax Credit you can reduce your taxes and increase your tax refund. In general, the EITC allows more working people and their families to keep more of their hard-earned money. The income limits for the Earned Income Credit have been adjusted for 2014, so even if you didn’t qualify for the EITC in the past, you may be able to claim it this year. The maximum amount of the credit has also increased.
Tax credits mystify many Americans, if only because it's hard to know which ones they qualify for and why. They're worth having because they provide meaningful savings on a filer’s overall tax contribution and in some cases lead to a tax refund. One of the most beneficial credits for families with low or moderate incomes is the Earned Income Tax Credit (EITC). It was established to offset the burden of Social Security taxes and provide an incentive to work. Experts of financial planning and taxes recommend all filers explore their eligibility for receiving the EITC. "It is an overlooked credit all too often," says Sandy Zinman, committee chairman for the National Conference of CPA Practitioners.
The Earned Income Tax Credit, or EITC, can be modified to specifically help lesbian, gay, bisexual, and transgender, or LGBT, people, a disproportionate number of whom are living in poverty. The EITC is one of the nation’s most effective tools for reducing poverty. In 2013, the EITC lifted 6.5 million people out of poverty by providing an average credit of around $2,400. This fact sheet explains the EITC and discusses how proposed modifications to improve its effectiveness can help the LGBT community.
Millions of low and moderate-income workers may be missing out on a significant tax credit that can be as much as $6,000. If you earned $52,427 or less last year, you may qualify for the Earned Income Tax Credit (EITC) for the first time in 2015. About a third of the people eligible for EITC fluctuate each year based on changes to their marital, parental and financial status. “About 4 out of 5 eligible workers and families get the credit they earned. That leaves millions missing EITC every year,” said Internal Revenue Service (IRS) Commissioner John Koskinen. “It’s an important credit and one of the government’s best tools to fight poverty.” Last year, almost 28 million eligible workers and families received $66 billion total in EITC, with an average EITC amount of $2,400.