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EITC Awareness Day: IRS Kicks-Off Tax Season Alerting Low- and Moderate-Income Workers of Significant Tax Benefit

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IR-2014-10, Jan. 31, 2014 — As the Internal Revenue Service starts processing returns today, it joins partners nationwide in launching the Earned Income Tax Credit Awareness Day outreach campaign to ensure that millions of low-and moderate-income workers get the credit they deserve and get it right.

Local officials and community organizations across the country are holding news conferences and outreach events highlighting the benefits of this key work incentive for individuals and families who earned $51,567 or less last year. An estimated four out of five eligible workers and families get the credit, but millions miss it annually either because they don’t claim it when filing or don’t file a tax return at all.

“One-third of the population eligible for EITC changes each year as their personal circumstances change,” said IRS Commissioner John Koskinen. “We want workers who may qualify for EITC for the first time to have all the information they need to get the EITC and get it right.”

The EITC varies depending on income, family size and filing status. The IRS has upgraded the interactive EITC Assistant, at www.irs.gov/eitc, to better help taxpayers and tax preparers. People can answer a few questions about income, family size and filing status, among other things. The EITC Assistant will help determine eligibility and will figure an estimated EITC refund. You can even get a printout explaining why you do or do not qualify. Last year, over 27 million eligible workers and families received more than $63 billion total in EITC, with an average EITC amount of $2,300.

Workers, self-employed people and farmers who earned $51,567 or less last year could receive larger refunds if they qualify for the EITC. That could mean up to $487 in EITC for people without children, and a maximum credit of up to $6,044 for those with three or more qualifying children. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax. 

Get the Credit: How to Claim the EITC

To get the EITC, workers must file a tax return, even if they are not required to file, and specifically claim the credit. Free tax help is available. Those eligible for the EITC have free options:

  • Free File on IRS.gov Free brand-name tax software walks people through a question and answer format to help them prepare their returns and claim every credit and deduction for which they are eligible.
  • Free File using Free File Fillable Forms. This option, designed for taxpayers comfortable preparing their own returns, allows people to file electronically for free using online versions of IRS paper forms.
  • Free tax preparation sites EITC-eligible workers can seek free tax preparation at thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites. To locate the nearest site, taxpayers can search www.IRS.gov or call the IRS at 800-906-9887.

The IRS reminds taxpayers that even though most refunds are issued in less than 21 days, many factors can affect how long it takes to issue a particular refund. Some returns require additional review, causing it to take longer to process any related refunds. Taxpayers can track the status of their refund with the “Where’s My Refund?” tool available on IRS.gov.

Get It Right: Avoid Errors

Taxpayers are responsible for the accuracy of their tax return regardless of who prepares it. The rules for EITC are complicated. The IRS urges taxpayers to seek help if they are unsure of their eligibility.

Some common EITC errors are:

  • Claiming a child who does not meet the relationship, age or residency tests
  • Filing as "single" or "head of household" when married
  • Over or under reporting of income and or expenses to qualify for or maximize EITC
  • Missing Social Security numbers or Social Security Number and last name mismatches for both taxpayers and the children

More than half of EITC claims are prepared by tax professionals and people should choose trustworthy assistance. To help ensure that only those eligible get the credit and that everyone who is eligible gets the right amount, the IRS requires paid preparers to file Form 8867, Paid Preparer's Earned Income Credit Checklist, with any federal tax return claiming the EITC.

The IRS continues to look for ways to reduce these errors. Taxpayers should reply promptly to any letter from the IRS requesting additional information about EITC. If taxpayers need assistance or have questions, they should call the number included in the IRS letter.

Beware of Scams

EITC provides a financial boost for millions of hard-working Americans. However, a deliberate error can have lasting impact on future eligibility to claim EITC. Beware of scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty. If an EITC claim was reduced or denied after tax year 1996 for any reason other than a mathematical or clerical error, taxpayers must file Form 8862, Information To Claim Earned Income Credit After Disallowance, with their next return to claim the credit.

More information on EITC and detailed eligibility rules are available at www.irs.gov/eitc. IRS partners should also visit EITC Central at www.eitc.irs.gov for helpful resources.

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Page Last Reviewed or Updated: 05-Feb-2014