Workers May Qualify for the Earned Income Tax Credit (EITC)
American workers with low to moderate incomes may qualify for the Earned Income Tax Credit (EITC), a federal tax credit that provides a financial boost for employees in a recovering economy. In recognition of EITC Awareness Day, Goodwill® is encouraging people who earned less than $49,078 to see if they qualify for EITC. In doing so, they could receive as much as a $5,751 tax credit from the Internal Revenue Service (IRS). Even if they do not need to file federal tax returns based on salary, these workers must still file in order to claim the credit.
As part of Goodwill’s partnership with the IRS, more than 100 Goodwill agencies nationwide are promoting the EITC in their local communities. In addition, eighty-nine local Goodwill agencies are operating Volunteer Income Tax Assistance (VITA) sites to provide free tax preparation services to workers who qualify for the EITC. Through its efforts, Goodwill aims to help workers use this tax credit to keep more of their paychecks and provide more financial stability for themselves and their families.
“Only four out of five eligible Americans claim and receive the Earned Income Tax Credit, “ said Jim Gibbons, president and CEO of Goodwill Industries International. “Goodwill’s VITA sites provide the free services individuals, with our without children, need to claim the tax credit they have already earned.”
The EITC has been in existence for more than 37 years. It is essential that workers research to find out if they qualify, especially if their financial, marital and parental statuses have changed in the past year. The tax credit can mean a tax return of up to $5,751, a vital amount that will help families pay for household expenses like childcare or housing, and it can also be put toward long-term investments such as a college education or retirement. The IRS estimates that certain populations who qualify for the EITC may be missing out on thousands of dollars each year by not filing for this credit. These include the following workers who are living in rural areas; self employed; receiving certain disability pensions or have children with disabilities; not proficient in English; grandparents raising their grandchildren; recently divorced, unemployed or have experienced other changes to their marital, financial or parental status; as well as those who do not have a qualifying child.
Goodwill’s mission is to provide job training, and career and community-based services to people with disabilities, those who lack education or work experience and others who face challenges to finding employment. Goodwill aims to not only help people earn jobs, but also to encourage them to take advantage of the services and tax credits they’ve earned to strengthen their financial stability and better care for their families.
Goodwill advises people to steer clear of refund anticipation loans (RALs), which rank among the most avoidable tax-time expenses. According to the Consumer Federation of America and the National Consumer Law Center, RALs — short-term, high-interest loans — drained $664 million from the pockets of nearly 7.2 million American taxpayers in 2009.
“Millions of workers will qualify for the EITC for the first time this year and it may provide a family the financial boost it needs to live above the poverty line,” said Gibbons. “Goodwill wants workers with low and moderate incomes, including those who come from rural or non-traditional families, to inquire about and claim this valuable tax credit.”
To learn more about EITC or to see if you qualify, visit the IRS’s EITC homepage.
