MOUNTAINSIDE — The Internal Revenue Service and New Jersey community groups are promoting Earned Income Tax Credit (EITC) awareness. This tax credit could be a critical financial lifeline to many Americans this year.
Last year in New Jersey, over 498,000 filers received over $956 million from EITC. The average EITC amount in New Jersey was $1,920. Nationwide last year, nearly 24 million taxpayers received approximately $48 billion from EITC. The average EITC amount was $2,000.
“Difficult economic times may mean more people are eligible for EITC because of reductions in their income last year. The amount of the EITC, the government’s largest tax benefit program for working families and individuals, is determined by earned income and family size,” said New Jersey’s IRS Spokesperson Gregg Semanick.
“Many Americans experienced financial hardships last year. People may be eligible for EITC for the first time and really should check out their eligibility. This is a significant credit that can make their lives a little easier,” said IRS Commissioner Doug Shulman. “EITC can provide a real dollars and cents boost when it’s needed most.”
For the 2008 tax year, the maximum credit is $4,824 for a family with two or more children; $2,917 for a family with one child and $438 for a childless taxpayer.
Generally, earned income and adjusted gross income must each be less than:
• $38,646 ($41,646 married filing jointly) with two or more qualifying children;
• $33,995 ($36,995 married filing jointly) with one qualifying child;
• $12,880 ($15,880 married filing jointly) with no qualifying children.
Even in better times, IRS research indicates that one in four eligible taxpayers fails to claim EITC each year. Those missing out include people who have earned income but may not have a filing requirement, non-English speakers, non-traditional families, grandparents raising a grandchild, the homeless, childless workers and rural residents.
Volunteer Income Tax Assistance
Taxpayers who earned less than $42,000 may take advantage of the Volunteer Income Tax Assistance (VITA) program and have IRS-trained volunteers help them e-file their federal return for free. Each year, the IRS partners with community organizations throughout the United States to provide this service. To find a location nearest you call the IRS at 1-800-906-9887.
AARP offers the Tax-Aide counseling program. Trained and certified AARP Tax-Aide volunteer counselors help people of low-to-middle income with special attention to people age 60 and older. To locate the nearest AARP Tax-Aide site, call 1-888-227-7669 or visit AARP’s Internet site.
Free File Online
EITC-eligible taxpayers also qualify for online Free File where they can use free online tax preparation software that will help them prepare their return and e-file it for FREE. E-file software is the most accurate way to file a return and makes it easy to ensure the taxpayer is claiming the appropriate EITC amount. Go to the IRS.gov Web site at www.irs.gov and access the Free File Program.
EITC Resources On IRS.Gov Web Site
Nearly 70 percent of all EITC returns are prepared by a third party or tax professional. Tax preparers and taxpayers can find a wealth of information at EITC Central, which includes statistics, online tools and marketing products. Both also can use the EITC Assistant, which is an easy-to-use interactive tool to help determine if the taxpayer is qualified for EITC. The EITC Assistant also is available in Spanish.