According to the IRS, there are at least 25 percent of taxpayers that qualify to receive EITC each year but don’t claim it. They say that in 2005, over 22 million taxpayers who claimed the credit were able to save $41.4 billion dollars in taxes they did not have to pay or received refunds.
Families that are qualified can claim up to $4,536 in a refundable credit. Those who don’t claim the credits are families who have such low income that they are not required to file, or those who are at a disadvantage because they prepared their own taxes, instead of taking it to a professional tax preparer.
The EITC was first developed for employed low-income families with children. In order to be qualified for the credit you must have earned income of less than $12,120, or $14,120 if you are married and filing jointly, and have no qualifying children. Or, if you and your husband are filing jointly with one qualifying child, and your earned income is less than $32,001 or $34,001. Lastly, you will qualify if you are married and filing jointly with more than one qualifying child with an earned income of $36,348 or $38,348.
To get the credit, applicants can not use the filing status “married, filing separately,” they must have a valid Social Security number, and an earned income from employment or self-employment. Applicants also must have been employed for part of 2006 and must file a tax return.
Filers without a qualifying child must be between 25 and 64 years of age by the end of the year, and must have resided in the U.S for more than half the year. Filers can not qualify as a dependant of another person
Earnest Young is a tax and accounting writer for Accent Accounting & Taxes - http://accentaccounting.net