The Earned Income Tax Credit: What You Need to Know
Horizon wants to ensure that workers across the country know about the advantages of this tax credit. We want to make sure you’re aware of this opportunity to get money back from the government when you do your taxes this year.
Here are the basics:
What is the EITC?
The EITC is a tax credit designed specifically for lower- and moderate-income families, to help them meet their financial needs. Under the EITC, qualifying workers will get money back from the IRS to offset at least part of their tax burden. Many people actually receive money back, as well.
To qualify for the EITC, you must have earned some income from working in the past year. And you must have been a U.S. citizen or resident alien for the entire tax year — which means you also need to have a valid Social Security number for everyone who appears on your return.
Other qualifications, including the amount of income you’ve earned, may vary depending on your specific circumstances. For instance, you’re allowed a higher income if you have three or more children.
How much money could I get?
This amount varies dramatically based on your circumstances and income. Those with three or more children may receive an EITC of as little as $11, or as much as $6,269 for the year 2016. Meanwhile, workers with no children may still receive as much as $506.
But according to the IRS, last year’s average EITC amount was about $2,455 — and 27 million eligible workers and their families got to take advantage of the program. And that money can make a big difference to many workers.
If you have children and have earned less than about $55,000 for the year 2016, you should consider looking into the EITC, because you may qualify. If you’re using an online tax tool to complete your tax filing for the year, your favorite tool’s site should help you determine whether you qualify. Or of course, you can talk to an account or a Horizon Bank advisor for some guidance.
You can also visit IRS.gov/EITC for further details. And if you have additional questions, please contact us! We hope that all of our customers who qualify for the EITC will be able to take advantage of it during this tax season.