If you worked in 2011, don’t miss claiming the Earned Income Tax Credit
From the Minneapolis Labor Review, January 27, 2012
If you worked in 2011, you may be eligible for federal and state tax credits that will put money back in your pocket.
You could be eligible to get more money back from the IRS — as much as $5,751.
If you earned less than $49,078 from wages, self-employment or farming last year, you may qualify for a refundable federal tax credit called the Earned Income Tax Credit, or EITC. But you must file a federal income tax return claiming the credit to get it.
If you qualify for the federal Earned Income Tax Credit (EITC), you also qualify for the Minnesota Working Family Credit. You must first determine that you meet the federal requirements.
To claim the Minnesota Working Family credit, you must file Form M1, Minnesota Individual Income Tax Return, and Schedule M1WFC.
EITC can be a big financial boost for working people in a recovering economy. Millions of workers who saw their earnings drop in 2011 may qualify for the first time.
The credit has been making the lives of workers a little easier for more than 37 years. Yet it remains little known, possibly because people move into and out of eligibility as their financial, marital and parental statuses change.
The IRS estimates four of five eligible workers claim and get their EITC.
Unlike other tax credits, both EITC eligibility and the amount of tax credit you are eligible for is based on several factors. These include, the amount of your income, or combined incomes if married, whether you have qualifying children and how many. Workers without children also may qualify.
Filing status and income limits determine the amount of the credit. You may qualify for EITC even if you had no federal tax withheld or are not otherwise required to file.
The credit may sound complex, but it is worth exploring to see if you qualify.
According to the IRS, each year millions of eligible workers do not claim their credits, missing out on millions of dollars they have earned.
The online EITC Assistant at www.irs.gov/eitc can help determine your eligibility and estimate the amount of your credit.
Remember: if you are eligible, you must file a federal income tax return, even if you are not otherwise required to file, and you must specifically claim the credit to get it. Find more information about EITC at www.irs.gov or in your tax software package.
According to the IRS, rural and non-traditional families — such as grandparents raising grandchildren — childless workers, and non-English speaking taxpayers are among those who most frequently overlook the credit.
Free tax help
Free help preparing your return and claiming EITC is available at volunteer income tax assistance sites. To locate a volunteer site, call your community’s 211 or 311 number for local services or call the IRS at 1-800-906-9887.
Greater Twin Cities United Way’s annual “Claim It!” tax-preparation program has helped working people and their families collect, on average, $2,200 in tax credits.
You may be eligible for free tax preparation if your individual income is at or below $30,000, or if your household income is at or below $50,000.
For specific eligibility requirements and a list of free tax preparation sites, call United Way 211 or 651-291-0211 from a cell phone.
Visit www.taxes.state.mn.us, and search for “free tax preparation sites.”
“Claim It!” is a United Way-led, community-wide effort to educate eligible families about existing tax credits, particularly the federal earned income tax credit (EITC).
One of the participating United Way partner agencies offering free tax help is AccountAbility Minnesota. For more information, call 651-287-0187 or visit www.accountabilitymn.org.
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