What Is The EITC & How To Claim It
Filed Under EITC, Tax Refunds, Tax Returns, Tax Rules | Leave a Comment
What Is the EITC?
The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low-income working individuals and families. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
Does It Affect My Welfare Benefits?
The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.
How To Find Out If You Qualify for EITC This Year
To qualify, you must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.
You can find out if you are eligible for the Earned Income Tax Credit (EITC) by answering some questions and providing basic income information using the EITC Assistant.
The Assistant is available in English and Spanish.
Get more tax information and help at www.taxassistonline.com
Does the IRS Have A Refund For You?
Filed Under Tax Refunds, Tax Returns | Leave a Comment
This is a strange but true story.
As of Feb 2005, unclaimed refunds totaling more than $2 billion were sitting waiting for about 1.7 million people who had failed to file an income tax return for 2001.
To collect their money, they had to file a return with the IRS no later than April 15 2005.
OK but that’s history now , so what’s the point?
The point is that the IRS estimates that half of those who could claim refunds would have received more than $484.
For example, you may have had taxes withheld from your wages or made payments against your taxes out of self-employed earnings but had too little income to require filing a tax return.
You may also be eligible for the refundable Earned Income Tax Credit. (This is a refundable federal income tax credit for low-income working individuals and families.)
How Long Can I wait Before Filing A Return?
The law provides most taxpayers with a three-year window of opportunity to claim a refund. If no return is filed to claim the refund within three years, the money becomes property of the U.S. Treasury.
IMPORTANT NOTE:
There is no penalty assessed by the IRS for filing a late return qualifying for a refund.
In other words if the IRS owes you money you’re OK. However, if you owe them money, you’ll be liable for back tax and maybe penalties.
Is There A Catch?
If you are seeking a refund for say 2002 or 2003, your checks will be held if you have also not filed tax returns for other years in between e.g. 2003 or 2004.
In addition, the refund will be applied to any amounts still owed to the IRS and may be used to satisfy unpaid child support or past due federal debts such as student loans.
Nevertheless, it sounds like a good deal, unless you’re hiding out in the hills because you think you owe the IRS a suitcase full of $100 bills.
How Do I Get A Form?
Forms for the current and prior years are available on www.irs.gov or by calling 1-800-TAX-FORM (1-800-829-3676).
What If I Need Help?
You can call the IRS help line at 1-800-829-1040.
For more help with your tax check out www.taxassistonline.com
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