Tax credit gets a push by IRS for low-income families
Even the professionals admit the Earned Income Tax Credit is a complex section of the federal tax code but with families who use it receiving an average of $2,000 more in their refund checks, the extra time to figure out the credit could reap a sweeter return.
The Internal Revenue Service is launching a fresh push to raise a new awareness of the EITC which has been a part of the tax code for more than 30 years. Basically, taxpayers who earned less than $42,000 in 2008 may be eligible for a refundable tax credit of up to $4,800.
Noting the global economic crisis, Doug Shulman, IRS Commissioner said, “The IRS is going out of its way to help taxpayers.” Shulman spoke to reporters during a conference call Friday afternoon.
Last tax season, the earned income benefit paid out $48 billion to 24 million taxpayers, according to the IRS. The average credit was $2,000.
Up to 80 percent of eligible taxpayers are filing for the credit. Still, Shulman said the IRS will not be happy until every single person eligible for the benefit claims it.
“It certainly is worth the trouble but it typically is targeted for lower income families,” said Matt Pletcher, president of Insight Accounting Group in Goshen. “For a typical family earning wages in Elkhart County, there might be some merit in looking at it.”
In particular, Pletcher noted that since the benefit is a credit, even those who do not normally pay taxes may be eligible for these funds.
To help those eligible sort out the complexities of the EITC, the IRS is adding some Saturday hours to its taxpayer assistance centers. IRS personnel are available at the centers during the week and, for a limited time, on Saturdays to answer taxpayers’ questions, offer additional information about the EITC, provide publications about this credit and help prepare returns claiming the credit.
Whether taxpayers seek assistance at an IRS Taxpayer Assistance Center or from another tax return professional, they should take the following documents with them:
* Valid driver’s licese or photo identification
* Social Security cards for all individuals listed on the return
* Dates of birth for all persons listed on the return
*All income statements such as W-2, 1099, Social Security, unemployment, self-employment records
* Dependent child care information including payee’s name, address and Social Security number or Taxpayer Identification Number
* Proof of account at financial institution for direct debit or deposit
* Prior year tax return (if available)
* Any other pertinent documents or papers
