Wednesday, February 9, 2011

Earned Income Tax Credit (EITC) delivers big bucks

Sent to you by Steve Sherlock via Google Reader:

via Commonwealth Conversations: Revenue by Robert Bliss on 2/8/11

The federal Earned Income Tax Credit (EITC) delivers up to $5,666 in federal tax credit and $849.90 in state tax credit -- a combined $6,515.90 -- for eligible taxpayers.

Simply put, the EITC delivers big bucks to low- and moderate-income working families and individuals through a combined federal and state income tax credit.

In a statement issued Jan. 28, Lt. Gov. Timothy P. Murray said that "During these difficult economic times, it is even more important to inform residents about this tax benefit as well as the assistance available to acces the benefits." The Lt. Gov also has a video explainer on the credit at DOR's homepage at www.mass.gov/dor.

It is estimated that 20 to 25 percent of eligible families failed to apply for the tax credit in tax year 2009. Depending on family income and size, individuals and their families may be eligible for thousands of dollars in tax refunds even if they owe no income tax.

Here are some examples of the EITC. An individual with a maximum federal adjusted gross income of $13,460 and no children is eligible for $457 in federal credit and $68.55 in state credit. An individual with adjusted gross income of $35,535 and one child is eligible for $3,050 in federal credit and another $457.50 in state credit. An individual with adjusted gross income of $45,352 and three children is eligible for a federal tax credit of $5,666 and a state credit of $849.50, the maximum credit.

For married couples filing jointly, the adjusted gross income thresholds are about $5,000 higher. Thus, a couple with one child and an adjusted gross income of $40,545 is eligible for $3,050 in federal credit and $457.40 in state credit, while a couple with three children and an adjusted gross income of $48,362 is eligible for the maximum credit.

To assist taxpayers in filing for the EITC, the Massachusetts EITC Coordinated Campaign provides a host of locations at which taxpayers may complete and file their tax return, at no cost. Just click on the link to find the site closest to you.

DOR's website maintains a complete listing of EITC information. So far this filing season, the Commonwealth has paid $39.6 million in EITC to eligible taxpayers.

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