Tax credit can help those with low income

April 03, 2006|by TIFFANY ARNOLD


With less than two weeks left to file income tax returns, local, state and federal agencies are stepping up efforts to get more people to claim the state and federal Earned Income Credit.

The Washington County Department of Social Services recently launched a $16,237 ad campaign to make local families more aware of the Earned Income Credit (EIC), said David Engle, the agency's director.

"A lot of people don't know about the program," said Sharon Shafer, a supervisor at the department of social services.

The state of Maryland estimates that $109 million is available in earned income tax credits this year, said Michael Golden, a spokesman for the comptroller's office. But as many as 87,000 eligible households aren't taking advantage of the credit, Golden said.


"This money, for some people, could be life-saving," said Jim Dupree, a Maryland spokesman for the U.S. Internal Revenue Service.

The Earned Income Credit is a refundable federal income tax credit for low-income working individuals and families. Congress approved the tax credit legislation in 1975 in part to offset the burden of Social Security taxes and to provide an incentive to work.

When the credit exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The IRS launched its awareness campaign in late February.

Nearly 334,000 Maryland taxpayers claimed the EIC in 2005, but the IRS estimates that 20 to 25 percent of those eligible to claim the credit don't.

"That's just money that's not going back into the economy," Dupree said.

Shafer said the Washington County Department of Social Services started its EIC campaign in 2002. That year, $11.4 million in earned income credits was issued to Washington County residents, Shafer said.

In 2003, $13.5 million was issued, Shafer said. The department spent $3,855 on its EIC campaign that year.

Engle said the yearly campaigns are funded by federal money "allocated for the expressed purpose for getting people off public assistance."

"In addition to earning the tax credit, this will provide additional income to help (families) gain financial independence," Engle said.

Do you qualify?

The Earned Income Credit is a refundable federal income tax credit for low-income working individuals and families.

To find out if you qualify for the credit, go to and click on the Earned Income Credit link.

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