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IRS Encourages Tribal Communities to Check Out Earned Income Tax Credit

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Claiming EITC or ACTC? Your Refund May Be Delayed -- English | Spanish

IR-2018-12, Jan 25, 2018

WASHINGTON – The Internal Revenue Service urges Native American taxpayers to look into the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) to see if they qualify.

The EITC is a federal income tax credit for working people who don't earn a lot ($53,930 or less for 2017) and meet certain eligibility requirements. Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund. EITC can mean up to a $6,318 refund for working families with qualifying children. Workers without a qualifying child could be eligible for a smaller credit up to $510. On average, EITC adds an additional $2,445 to refunds.

The IRS has identified American Indian communities as a group of workers at risk for overlooking this important credit. There are many reasons qualified individuals and families do not claim the EITC. They may think they are ineligible, not know about the credit or worry about paying for tax preparation services. To get the credit, individuals must file a tax return, even if they do not owe any tax or are not required to file. Qualified taxpayers should consider claiming the EITC by filing electronically, whether through a qualified tax professional; using free community tax help sites; or doing it themselves with IRS Free File.

To qualify for EITC, the taxpayer must meet basic rules and have earned income from employment, being self-employed or running a business. This includes home-based businesses and work in the service, construction and agriculture industries. Eligibility also depends on family size, but single workers without a qualifying child who earn less than $15,010 may qualify for a smaller credit. Also, certain disability payments may qualify as earned income for EITC purposes. The IRS recommends using the EITC Assistant on IRS.gov, available in English and Spanish, to determine eligibility and estimate the amount of the credit.

Many EITC filers will get their refunds later this year than in past years. That’s because by federal law, the IRS cannot issue refunds for tax returns that claim the EITC or the Additional Child Tax Credit (ACTC) before mid-February. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting on Feb. 27, 2018, if they chose direct deposit and there are no other issues with the tax return. Even so, taxpayers claiming the EITC or ACTC should file as soon as they have all the documents they need to prepare a complete and accurate return.

The IRS and partners nationwide will hold the annual EITC Awareness Day on Friday, Jan. 26, 2018, to alert millions of workers who may be missing out on this significant tax credit and other refundable credits. One easy way to support this outreach effort is by participating in the IRS Thunderclap to help promote #EITCAwarenessDay through social media. For more information on EITC and other refundable credits visit the EITC page on IRS.gov.