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Tax credit available for many

February 06, 2009|By LYNN LITTLE

One of the largest benefit programs for working taxpayers is also one of the most overlooked tax credits. It's called the Earned Income Tax Credit and, as the name implies, it's for people who work for a living but don't make a lot of money. This year some individuals and families might qualify for the credit for the first time because of unemployment or other changes in their financial, marital or parental status during the past year.

Taxpayers with the earnings of or less than $38,646 ($41,646 if married filing jointly) for families with two or more children; $33,995 ($36,995 married filing jointly) for families with one child or $12,880 ($15,880 married filing jointly) if there are no children should check to see if they qualify.

You might qualify if your income was less than $41,646 last year and you, or your spouse, had income from wages, self-employment, farming or, if under the minimum retirement age, from disability retirement benefits paid under an employer plan. The amount of your EITC could be as much as $4,824 depending on how much you earned, your filing status, whether you have children, etc. Find more information at www.irs.gov/eitc. The online EITC assistant can help determine your eligibility and the amount of your credit.

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To get the EITC you earned, you must: 1. File a federal income tax return and 2. Claim the EITC. IRS estimates that up to one in four eligible taxpayers fail to file and claim their credit. The extra dollars eligible taxpayers can get through EITC can make life a little easier but you must file a tax return, even if you aren't required to file and claim the credit to receive it.

Many communities have volunteer income tax assistance sites or local IRS Taxpayer Assistance Centers, which will compute your EITC and prepare your return without charge. To locate a volunteer site, call the IRS at 800-906-9887.

People should come prepared with the following items:

o Valid driver's license or photo identification (self & spouse, if applicable)

o Social Security cards for all persons listed on the return

o Dates of birth for all persons listed on the return

o All income statements: Forms W-2, 1099, Social Security, Unemployment, or other benefits statements, self-employment records and any documents showing taxes withheld

o Dependent child care information: payee's name, address and SSN or TIN

o Proof of account at financial institution for direct debit or deposit (i.e. canceled/ voided check or bank statement)

o Prior year tax return (if available)

o Any other pertinent documents or papers

o To file taxes electronically on a married filing joint tax return, both spouses must be present to sign the required forms.

The Earned Income Tax Credit is the federal government's largest program benefitting lower earning workers.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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