IRS Tax Tip 2018-11, January 24, 2018
The IRS wants taxpayers living in rural communities to be aware of the earned income tax credit and correctly claim it if they qualify. Many qualified individuals and families who live in rural areas don’t claim the EITC. There are many reasons for this. They may:
- Think they are ineligible.
- Not know about the credit.
- Not think they made enough money to qualify.
- Worry about paying for tax preparation services.
The average household income in many small towns and rural areas is below the national average. Because of this, many of these taxpayers may qualify for EITC. Here are some things that people living in these areas should remember about the credit and how it can benefit them:
- Because it’s a refundable tax credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.
- An eligible taxpayer must have earned income from employment or owning a business or farm and meet basic rules.
- To get the credit, taxpayers must file a tax return, even if they don’t owe any tax or aren’t required to file.
- Single workers without a qualifying child who earn less than $15,010 may qualify for a smaller amount of the credit.
- There are special rules for individuals receiving disability benefits and for members of the military.
- The IRS recommends using the EITC Assistant on IRS.gov to determine eligibility and estimate the amount of credit.
Qualified taxpayers should consider claiming the EITC by filing electronically, which they can do:
- Through a qualified tax professional.
- Using free community tax help sites.
- Themselves, with IRS Free File.
By law, the IRS cannot issue refunds before mid-February for tax returns that claim the EITC or the additional child tax credit. The law requires the IRS to hold the entire refund — even the portion not associated with the EITC or ACTC. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards starting Feb. 27, 2018, if these taxpayers choose direct deposit and there are no other issues with their tax return.