80 percent of eligible taxpayers claim and get this important credit
PHOENIX – The 15th annual Earned Income Tax (EITC) Awareness Day, on Jan. 29, is a joint venture between the IRS and its many partners and stakeholders to inform qualifying taxpayers and underserved populations how to increase their federal tax income.
EITC can increase a federal tax refund from $1 to $6,660 for qualified taxpayers. In 2018, EITC lifted about 5.6 million people out of poverty, including 3 million children. IRS estimates four of five, or 80%, of eligible taxpayers claim and get this important credit.
One of the nation’s largest anti-poverty programs, as of December 2020, about 25 million taxpayers received nearly $62 billion in EITC. The average amount nationwide was $2,461.
New this tax season, under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, taxpayers may elect to use their 2019 earned income to figure the credit if their 2019 earned income is more than their 2020 earned income. The same is true for the Additional Child Tax Credit. For details, see the instructions for Form 1040.
“The Earned Income Tax Credit can make a huge difference for hard-working but struggling men and women as well as newly eligible taxpayers,” said Cynthia Zwick, executive director at Wildfire, a nonprofit organization whose mission is to end poverty before it starts. “It is the federal government’s largest benefit for workers. We know that there are millions of eligible taxpayers who are not using the benefits of EITC because they may not be aware that it is available to them.”
Wildfire partners with several agencies and organizations to provide free tax preparations. Information can be found at www.myfreetaxes.com. Partnering organizations include the Mesa Community Action Network (A New Leaf, (480-833-9200), City of Phoenix (602-495-3678, 602-262-4948), Gila County (928-474-7192), Masters of Coin (480-215-4279), Rehoboth CDC (602-882-8823), Tempe Community Council (864-906-7096) and Trinity United (623-252-9439).
Income and family size determine the amount of the EITC, which is adjusted for inflation each year. Qualifications for EITC, including income limits and range of EITC, can be found at www.eitc.irs.gov.
Eligible taxpayers can claim EITC credits with help from a Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly. Taxpayers can find the nearest VITA/TCE site by using the Locator Tool at IRS.gov, using the IRS2Go app, or calling the IRS at 800-906-9887. Those seeking help at the nearest AARP location should go to https://www.aarp.org/money/taxes/aarp_taxaide/.
For more information about Wildfire, go to www.wildfireaaz.org.
Wildfire is a growing movement to end poverty. We advocate for fair practices. We collaborate on policy issues. We support community action initiatives. Beyond easing the effects of poverty, our efforts aim to ignite lasting change: to stop poverty before it starts. This is advocacy in action for an Arizona where all may thrive. For more information visit wildfireaz.org.