About the Earned Income Tax Credit (EITC)
• The EITC is a tax credit for people
who work but don't earn enough to cover basic living expenses. Low-income families can use the EITC to put food on the table, move into better housing,
invest in education, have reliable transportation, or save for the future.
• The EITC is a refundable tax credit - meaning that if the credit reduces the filer's tax liability to zero, the filer gets the remaining amount of the credit in the form of a refund.
• Many people are qualified to
claim the EITC but don't know it - about $31.5 million in EITC dollars
for eligible families went unclaimed in Travis County in 2004.
• A recent Brookings Institution
report indicates that about 30 percent of all EITC dollars are used by
working families with low incomes to pay for housing costs - effectively making
the EITC one of the largest housing programs in the nation.
• In 2005, EITC filers with children
could receive up to a $4,300 credit.
• Last year, the EITC lifted 5
million people above the poverty level, more than any other federal
program.
• For some workers, the EITC can
be the equivalent of a $1-$2 per hour raise.
For more information, see the IRS website on the Earned Income Tax
Credit program:
+ Click
Here!
About the Child Tax Credit
• This credit may be claimed in
addition to the EITC if you have a qualifying child. See tax form
1040 or 1040A for details on who qualifies.
• In 2004, people who filed for
the child tax credit could receive up to $1000 per child.
• In general, the child tax credit
is limited to the amount of tax you would have had to pay.
For example, if you were eligible for a $600 tax credit but only
owed the IRS $500, you would receive a $500 tax credit. However,
there are exceptions.
For more information, see the IRS webpage on the Child Tax Credit.
+ Click
Here!
General Tax Information
See the following websites for more information on a range of tax
topics:
+ IRS
+
Tax Policy Center
+ The
Center on Budget and Policy Priorities
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