Millions could overlook valuable tax credit

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Press release from the Internal Revenue Service:

MILWAUKEE, January 24, 2013 – The Internal Revenue Service wants to raise awareness about a tax credit that could mean thousands of dollars to working families in Wisconsin.

On Jan. 25, the IRS will partner with state and local government officials and community partners for the 7th annual EITC Awareness Day, a nationwide effort to increase public awareness about the Earned Income Tax Credit and free tax preparation sites.

Last year, around 383,000 families in Wisconsin received approximately $790 million in EITC with an average amount of $2,062.

In Milwaukee County alone, some 92,000 families received approximately $230 million in EITC, with an average amount of $2,483.
"About a third of the people eligible for EITC changes every year, probably because they get a job or lose one, have a child or change their marital status,” said IRS spokesperson Christopher Miller. “This changing population of people who are eligible is why it’s so important to raise new awareness every year.”

People who work and earn less than $50,270 from wages, self-employment or farming may be eligible for EITC and free help preparing their tax return.

Although an estimated four out of five eligible workers and families get the credit, one in five still miss out, either because they don't claim it when filing, or don't file a tax return. This is money that can make a difference. Nationally last year, the credit returned close to $62 billion to more than 27 million workers.

The credit can mean up to $475 in EITC for people without children, and up to $5,891 for those with three or more qualifying children. EITC varies by income, family size and filing status.

With the exception of some disability income, people must work to qualify for EITC. They earned it. Now they must file, claim it and get it. IRS-certified volunteers who offer free tax return preparation at VITA sites across the country can help families learn if they are eligible for the credit.

Workers should come prepared to a volunteer site with the following:
- A valid driver's license or other photo ID card
- Social security cards, a Social Security number (SSN) verification letter or the Individual Taxpayer Identifying Number (ITIN) for all persons listed on the return
- Birth dates for all persons listed on return
- All income statements: Forms W-2 and 1099, Social Security, unemployment, and other statements, such as pensions, stocks, interest and any documents showing taxes withheld
- All records of expenses, such as tuition, mortgage interest, or real estate taxes
- Copies of last year's state and federal tax returns, if available
- Bank routing numbers and account numbers to direct deposit any refund
- Dependent child care information: name and address of who you paid and either the caretaker's SSN or other tax identification number
- Both spouses to sign forms to e-file (electronically file) a joint tax return


EITC is for workers whose income does not exceed the following limits:
- $45,060 ($50,270 married filing jointly ) with three or more qualifying children
- $41,952 ($47,162 married filing jointly) with two qualifying children
- $36,920 ($42,130 married filing jointly) with one qualifying child
- $13,980 ($19,190 married filing jointly) with no qualifying children

Investment income must be $3,200 or less. And, children must meet certain relationship and residency requirements to be a qualifying child.

EITC can make life a little easier. The maximum credit is:
- $5,891 with three or more qualifying children
- $5,236 with two qualifying children
- $3,169 with one qualifying child
- $475 with no qualifying children

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