Concord, NH (PRWEB) February 7, 2008
Money from the IRS? That's right. It's called the Earned Income Tax Credit, or "EITC" -- a tax refund any New Hampshire taxpayer could be eligible for, even if a taxpayer does not owe any taxes. Congress enacted the EITC in 1975 to offset the burden of social security taxes on low-income workers. According to the IRS, 75 to 80 percent of eligible individuals claim the credit each year, a total of over $43 billion in 2006. But that means 15 to 20 percent of eligible taxpayers don't take the credit, to the tune of over $8 billion. This year, the government wants to make sure everyone who is eligible takes advantage of the EITC. but hurry! This month there is free tax help offered to NH taxpayers.
Why? There are several reasons:
1. It rewards workers. To qualify for the EITC, one has to be working and making money. Not a lot of money -- the idea is to help those who are working hard but not making a high income. Basically, the EITC lets people keep more of the money they earn.
2. It fights poverty. The EITC actually puts more money into the pockets of low-income workers than the federal welfare program -- as much as $41 billion in 2005.
3. It helps the economy. Since low-income families spend most of their money locally, the EITC pumps billions of dollars into the economies of low-income communities. The effects are especially big in rural areas where many jobs pay low-wages and fewer earning opportunities are available.
Who qualifies for the EITC? You do, if you: have earned income from employment or self-employment; have a social security number; do not file your taxes as "married filing separately"; are a US citizen, a resident alien or married to and file taxes with a citizen or resident alien; have a qualifying dependent child, or if child-free, are between the ages of 25 and 65; are not claimed as a dependent on someone else's tax return; meet the income guidelines.
What are the income guidelines? For the 2007 tax year, couples filing jointly must earn less than $39,783 if they have 2 children, $35,241 if they have 1 child, and $14,590 if they have no children. Income limits for single taxpayers are $2,000 less in each category.
Why doesn't everyone who's eligible claim the EITC? Probably because they don't know about it. Many taxpayers only find out about it when they use a paid tax preparer. But such preparers charge a fee to cover the cost of preparing your return. The government would rather you get that money.
"Our goal is to get as much of the earned income tax credit as possible directly back into the pocket of the taxpayer," according to Suzann Knight, UNH Cooperative Extension, coordinator of the NH Statewide EITC Alliance.
That's why the IRS is joining forces with the NH Statewide EITC Alliance, NH Charitable Foundation and Annie E Casey Foundation to promote EITC Awareness. By now, all workers should have received their W-2 forms so they can file their tax returns. The IRS is also joining with community partners to provide Volunteer Income Tax Assistance (VITA) sites at locations across the state. Volunteer tax preparers -- who are all certified by the IRS -- will offer free tax preparation and assistance, as well as determining if you qualify for the EITC and how to claim the credit. In cooperation with the 2008 Real Economic Impact Tour -- designed to reach out to more than 1.5 million individuals with disabilities and help them build their financial assets -- most sites are handicapped accessible. Go online to http://www.nheitc.org to determine accessibility.
If you haven't been claiming the EITC credit but are eligible for it, you can even go back up to three years and amend your returns. Some taxpayers could receive as much as $13,000 if they file for three years all at once. And if you'd rather get your credit along the way rather than a lump sum at tax time, you can claim "Advance EITC" payments and receive up to 60 percent of your expected EITC with your regular paycheck.
To find a free tax preparation site in your area, go to http://www.nheitc.org and click on "Find a Free Tax Preparation Site Near You." Each taxpayer must bring an official picture ID (such as driver's license), all W2 statements from employers, original social security cards, and paperwork to substantiate any income or deductions.
In 2005, over 62,000 individuals and families in New Hampshire received EITC refunds of over $98 million, an average of about $1500. Maybe it's time you gave yourself some credit.
For more information on free tax sites located throughout the state of NH, visit http://www.nheitc.org or call the UNH Cooperative Extension Family Home and Garden Education Center at 1-877-398-4769. You can learn more about the EITC at the IRS web site, http://www.irs.gov/eitc and http://www.nheitc.org/.