Who Can Claim Earned Income Credit – Workers could get a bigger tax refund this year thanks to the Earned Income Tax Credit (EITC). But to obtain it you need to submit your tax return and request it.
January 31, 2020 marks the 14th anniversary of Awareness Day, a nationwide effort to raise awareness about the EITC and who can claim it. This year, Legal Aid of Arkansas is promoting EITC Awareness Day and free tax preparation sites in Arkansas. Attorney and Director of the Low Income Taxpayer Clinic, Jennifer Gardiner, will be on Facebook Live! at @Friday, January 31 at 2pm with more information about the EITC, who is eligible and how to apply.
Who Can Claim Earned Income Credit
In 2019, 283,000 Arkansas workers received more than $764 million in EITC refunds. The average EITC amount per person was $2,700.
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If you worked last year and had an income less than $55, 952 checks your eligibility for the EITC. The EITC can mean a refund of up to $6,557 when you file a return if you have qualifying children. Workers without eligible children may be eligible for a smaller credit of up to $529.
“Billions of dollars are left on the table unclaimed every year. We want to get the word out to those who are eligible to file a tax return even if they don’t owe any taxes to claim the EITC,” says Gardiner.
The EITC varies based on income, family size, and filing status. To be eligible you must have earned income or a certain disability income. This means that you must have an income by working for someone or by working for yourself.
Volunteers – trained by the Internal Revenue Service – will ask you the necessary questions to find out if you qualify for the EITC and other refundable tax credits. Volunteers at VITA (Volunteer Income Tax Assistance) sites prepare and electronically file (electronically file) your tax return at no cost to you.
Publication 503 (2022), Child And Dependent Care Expenses
Legal Aid does not prepare current year tax returns. We invite you to visit a free tax preparation site in Arkansas to file your 2020 application: The Earned Income Tax Credit (EITC) is the federal government’s largest benefit for workers. For people who have earned money by working for someone or running a business or farm, it is the money that has a positive impact on change in their life, family and community.
We know that four out of five eligible taxpayers receive the EITC. This means that millions of taxpayers are putting EITC dollars for them. But missing one in five means millions of people aren’t taking advantage of this valuable earned credit. Nearly a third of those qualifying for the EITC will do so for the first time this year due to changes in their marital, parental or financial status. That’s why it’s so important to reach out to programs like this partnership with the Initiative, the Jordan Institute for Families and the UNC School of Social Work, Foundation for Health Leadership and Innovation.
Source: The national EITC participation rate is 78% (TY2016), estimated in collaboration with the Census Bureau. The estimates for the year 2016 based on the Current Population Survey (CPS) are 78%, while the estimate for the year 2016 based on the American Community Survey (ACS) is 78.6%.
Source: House Committee on Ways and Means, Subcommittee on Oversight, Hearing on Improper Payments in the Administration of Refundable Credit
Do You Qualify For Child Tax Credit? Find Out Here!
Determining eligibility for the EITC is complicated. More than 20 separate determinations must be made. The basic qualifications are described here. Please refer to the EITC home page on irs.gov for more detailed information about who qualifies for the EITC.
The IRS estimates that four in five workers claim the EITC they earned. We want to help reach potentially skilled workers who miss out on thousands of EITC dollars every year. Our project is designed to help educate them about the tax credit and motivate them to join the four in five who apply and apply for it. This includes workers who are:
The “Get Back the Money You Earned” infographic was created by community teams to help spread awareness among North Carolinians across the state about the Earned Income Tax Credit as part of a research study jointly funded by the Robert Wood Johnson Foundation. Feel free to share this infographic widely with members of your community. This work was completed by an interdisciplinary team that included members of the Jordan Institute for Families at the UNC School of Social Work, UNC School of Government, the Initiative, Rural Forward NC, and Together Transforming Lives Inc. The study focused on the following counties : McDowell, Rockingham, Robeson, Beaufort, Nash, Halifax and Edgecombe. This research involved focus group interviews with 115 North Carolina rural leaders about their experiences promoting the EITC in their communities and the contributions of state and local community research groups.
Best Practice 1: Timely, personalized, targeted, and inclusive marketing efforts can ensure that tax officials have relevant information when they need it most and can better meet people where they are.
Policy Basics: State Earned Income Tax Credits
Summary: One of the most important best practices to increase EITC adoption is proper marketing/outreach to increase public awareness of the tax credit. Overall, a combined strategy of an automated phone call and mailing campaign has proven to be successful, while targeted online strategies have not produced a significant increase in filers. Additionally, targeting EITC information to certain groups has been shown to increase its uptake. Research indicates that framing the EITC as something owed to beneficiaries and it is already their money that they must claim is the most effective overall framing. Strategies targeted to employees in specific work locations, rather than broad notification of the EITC, result in greater adoption among EITC-eligible employees. One of the major barriers to adoption currently identified is lack of English proficiency. Some studies have indicated that having materials translated into Spanish increases participation among eligible Hispanics, but that is the extent of translation research.
Summary: Building on the previous recommendation, more reminders or using multiple different messaging strategies appear to prove more effective in increasing ETIC adoption. Using multiple approaches simultaneously and repeating and expanding such outreach efforts is necessary to achieve a more significant increase in EITC declarations. Governments and non-profit organizations that send informational emails about the potential benefits of tax filing with the provision of a free filing service have seen a moderate increase in the number of filers. Many of these new claimants were also eligible and claimed the EITC. IRS senders provided information about the EITC and how much money was being left on the table by non-recipients. Results indicated that a full rollout of mailers to all EITC-eligible non-recipients could increase uptake by 3% (reducing non-uptake from 25% of all eligible to 22%).
Summary: Disseminating information about the EITC through “trusted relationships” can also increase participation. Numerous studies have confirmed the IRS as a trustworthy institution, and mailers/information from it (as seen in the previous paragraph) can increase EITC adoption. Propaganda and word of mouth tend to be the most successful ways to spread the word about the free tax preparation services you offer. Other examples include local municipalities placing reminders about the EITC and its benefits on utility bills to remind residents of its availability. Other, more informal relationships (religious leaders and local nonprofit organizations) have not yet proven as effective.
Best Practice 4: Volunteer Income Tax Assistance (VITA) sites should recruit multilingual and community leaders as volunteer tax preparers.
Free Working Family Tax Credit Help
Summary: The availability of free tax preparation services has been shown to increase both tax filing rates and uptake of the EITC. Sponsoring the Volunteer Federal Income Tax Assistance Program has proven to be a proven way to increase EITC adoption. Reminding eligible recipients of their eligibility is the first step in increasing uptake. Often, recipients then turned to a free, locally available tax preparation service to file for the EITC. Otherwise, they would not have been as likely to claim EITC benefits. Having translation services available can increase adoption among Hispanic populations, a community that has been shown to be less likely to adopt the EITC.
Best Practice 5: Consider new ways to reach new EITC-eligible populations and educate them about expanded benefits.
Summary: Finally, studies examining interventions that seek to target newly eligible populations recommend that promoting the EITC as an “asset-building” tool has been most successful in increasing adoption. A “weak financial situation” among newly eligible families made them interested in learning about ways they could increase resources, such as the EITC. Most were unaware of the EITC as an asset building tool, further increasing the number of new claimants that could be reached via this method. As with other interventions with previously eligible populations, sending follow-up reminders, even just one, increased EITC uptake by 14%. Best practices for these reminders include better, clearer information and simpler design choices. The Earned Income Tax Credit (EITC) The Earned Income Tax Credit (EITC) is a refundable tax credit for low-income working families. The credit offsets tax liability, the total amount of tax debt owed by an individual, company, or other entity to a taxing authority such as the Internal Revenue Service (IRS), and can even generate a refund, with credit on income from work
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