A tax credit that millions of Americans don’t know about, missing out on the opportunity to get money
Who would not want to get the extra 300 or even 3000 dollars in cash? But, oddly enough, millions of Americans miss this opportunity every year, writes USA Today.
According to estimates by the Internal Revenue Service, only 4 out of 5 employees apply and receive a tax credit for earned income, having the right to do so. Thus, approximately 20% of them do not receive money, leaving billions of dollars unclaimed.
This is money based on what you earned in 2019, usually working for lower wages. The amount of dollars that Americans receive can vary significantly, depending on your salary, application status, and size of your family.
“Taxes have always scared me. “This is not what I wanted to deal with,” said India Bell, 50, who lives in Detroit and has two teens.
But Bell tells everyone about why you need to file a tax return in order to qualify for a tax credit on earned income. Bell was part of the annual Detroit media outreach program to talk about the EITC.
“You have earned it. Now apply, request and receive, ”say the IRS.
Very often, people don’t even know that there is such a tax credit. The IRS notes that one third of the US population applying for the EITC changes every year. People can enter and exit the program due to changes in their marital status, the age of their children, and how much money they earn at work.
A few years ago, Bell was able to get a tax filing service free of charge at a tax preparation point offered through the Wayne Metropolitan Community Action Agency, and then she realized that being a single working mother, she was entitled to a tax credit for her earnings. Bell earned less than $ 25 in 000 with a foster adult family in Auckland County. And she said that she was entitled to $ 2018 in the form of a loan for earned income.
She was able to pay some credit card bills, pay the old bill before he got to the collectors, and go on a mini-vacation to Makino Island in Michigan last summer.
“This year I want to pay off a credit card debt, combine a couple of other debts and make repairs in my garage,” she said.
And if there is enough money, a woman would like to go to Atlanta.
How to find out if you meet the requirements
You must have some income from work, and also you must meet other requirements, including income limits. Your investment income may be as low as $ 3600 or less per year.
Your earned income and adjusted gross income should be no more than $ 41 if you have one child that meets the criteria and you are not married. For a couple with one child filing a joint tax return in 094, the limit is $ 2019.
The more children you have, the higher your income limit. The maximum limit is $ 55 for a couple who file a joint declaration with three or more children who meet the criteria.
One person without children can apply for a loan with an income of $ 15 or lower.
The maximum tax credit for earned income is $ 6 for tax returns in 557, but to get this level you must have three or more children.
In the whole country, about 25 million workers and their families received about $ 63 billion from the EITC.
How much money can you get
The average EITC received last year by individuals across the country was about $ 2476.
This is a refundable tax credit, meaning that you can get more from the federal government than you paid in taxes. But the amounts vary significantly.
The maximum loan is $ 529 for those who do not have eligible children, up to $ 3526 for those who have one child.
The maximum loan amount is $ 5828 for those who apply with two eligible children, and $ 6557 for people with three or more children.
The IRS notes that the EITC loan varies:
- from 11 to 6557 dollars with three or more children;
- from 10 to 5828 dollars with two children;
- from 9 to 3526 dollars with one child;
- from 2 to 529 dollars without children.
More than half of the US states also have some type of income tax benefit in addition to a federal loan.
On the subject: 7 important facts about tax refunds in 2020
Find out if your child meets the criteria.
Among other requirementsBy the end of the year, your child should be no more than 19 years old if you are filing a joint declaration.
Or the child is a full-time student at least 5 months a year and his age until the end of the year does not exceed 24 years, if you file a joint declaration.
Or a child may have a permanent and complete disability at any age.
In addition, the child must be living with you or your spouse (if you are filing a joint declaration) in the United States for more than half a year. In this case, various kinship is acceptable, including a grandson or a sibling.
The IRS website irs.gov also has EITC Assistant, which will help you determine if you are eligible for a tax credit on earned income.
What if all this is too complicated for you
You can usually get help. Check out the IRS page "Free File" to get free software that will help those who receive a tax credit on earned income.
You can also call the IRS at 800-906-9887 for information on voluntary assistance and tax advice for older people. You can find points of such assistance on irs.gov.
How long does it take to wait for money
If you are applying for a tax credit for earned income or an additional tax credit for a child, the IRS cannot issue your return until mid-February. In addition, a three-day holiday weekend, including Presidents Day, affects the timing of the return.
The IRS expects that a tax refund, which includes money from the first income received and additional tax benefits for children, will be available on taxpayers' bank accounts or on debit cards by the first week of March if they choose a direct deposit and there are no other problems with their tax return .
You can check the page. “Where is my return?”to find out a personal date.
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