You May Qualify For a Significant Tax Benefit
Millions of taxpayers who earned $53,505 or less last year may qualify for the "Earned Income Tax Credit" or EITC for the first time in 2017.
“The EITC is an important anti-poverty tax credit that helps millions of people every year,” said IRS Commissioner John Koskinen. “Even though four out of five eligible workers and families benefit from the EITC, millions more miss out because they don’t know about it or don’t realize they’re eligible. We encourage people to look into whether they qualify.”
Workers, self-employed people and farmers who earned $53,505 or less last year could receive larger refunds if they qualify for the EITC. Eligible families with three or more qualifying children could get a maximum credit of up to $6,269. EITC for people without children could mean up to $506 added to their tax refund. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax. Last year, more than 27 million eligible workers and families received almost $67 billion in EITC; with an average EITC amount of more than $2,455!!!
Truax recommends that all workers who earned less than $54,000 contact us about EITC eligibility or use the EITC Assistant to find out if they qualify. This tool will help them determine their filing status, if they have a qualifying child or children, if they qualify to receive the EITC and estimate the amount of the credit they could get. If an individual doesn’t qualify for EITC, the Assistant explains why. A summary of the results can be printed and kept with the worker’s tax papers.
A new law approved by Congress requires the IRS to hold refunds claiming the EITC and the Additional Child Tax Credit (ACTC) until Feb. 15. By law, the IRS must hold the entire refund — even the portion not associated with EITC or ACTC. This change helps ensure taxpayers receive the refund they are owed by giving the agency more time to help detect and prevent fraud.
Even so, taxpayers can still get their refunds sooner by choosing direct deposit. The IRS will begin releasing these refunds on Feb. 15, but taxpayers should not expect to see them deposited into their bank accounts until the week of Feb. 27 – assuming there are no processing issues with the tax return.
Avoid Errors: Get It Right
Taxpayers are responsible for the accuracy of their tax return even if someone else prepares it for them. Since the EITC rules are complicated, we recommend you contact us right away to ensure you're eligible. Having a qualified tax preparer like Truax can help ensure you don't make any mistakes that may have a lasting impact on future eligibility to claim EITC or leave you with a penalty!
Be sure to reply promptly to any letter from the IRS requesting additional information about EITC. If taxpayers need assistance or have questions, call the number on the IRS letter.
Beware of Scams
Beware of scams that claim to increase the EITC refund. Scams that create fictitious qualifying children or inflate income levels to get the maximum EITC could leave taxpayers with a penalty.
Normally, if an EITC claim was reduced or denied in the past any reason other than a mathematical or clerical error, taxpayers must file Form 8862, Information to Claim Earned Income Credit after Disallowance, with their next return to claim the credit.
If you have any questions about EITC or ACTC filling requirements, please call us right away. We know how stressful this time of year can be and we're here to help!