There are many perks to the Earned Income Tax Credit or EITC for short; most people don’t even realize they may qualify for it or what the benefits are if they do qualify. This credit is given by the IRS to those who have low to moderate income and their families. The EITC was started in 1975 to help offset the burden of Social Security Taxes and to entice more people to work.
Finding out if you qualify for the EITC is quite simple. While it’s most common for lower income, workers with children to qualify, those who receive Social Security Disability may qualify as well.
Tax credits can add up to hundreds or thousands of dollars
This credit can offer quite a bit of money meaning that your family could receive up to $5,891.00. That’s a valuable credit I’m sure you wouldn’t mind having that included in your tax refund. Even if you don’t have a child you could still receive an extra $475.00.
Most tax payers assume if they don’t have a large family, or may be receiving an unconventional income, that they don’t qualify, this is not always the case. When preparing your taxes with tax software, or a tax professional you will be able to find out if you are within the guidelines or not.
EIC guidelines and benefits
The basic requirements to receive the tax credit are; you must be within a certain income guideline, your family size and your filing status. The average refund amount was around $2,200. Over 27 million eligible workers and families received nearly $62 billion total in EITC for the 2011 tax year.
While it is possible to get the EITC without a qualifying child, there are certain rules and other requirements you must meet. Using an EIC tax table can help guide you in the right direction. Another great perk of qualifying for the EITC is that you may also qualify for free tax preparation. Utilizing the benefits afforded to you by the Earned Income Tax Credit, can yield you higher tax refund results and minimal to no cost preparation of your taxes.
Tax software is your best chance to claim your tax credits. By answering simple questions the program will fill in your entries into the correct place. Your tax return will be scanned many times before you file to ensure you will not miss any valuable tax credits or tax deductions.