Lowell residents could overlook a special federal tax credit because they don’t know about it. As a result, they could miss out on up to $5,751 extra in their federal income tax refunds through the Earned Income Tax Credit, or EITC.
Created in 1975, EITC helps offset the impact of Social Security taxes and provides an incentive for work. It is the federal government’s largest benefit program for workers. EITC is one of the nation’s largest anti-poverty programs, annually lifting 6.6 million people out of poverty; half of these are children. The average credit last year was $2,100, but can be as much as $5,751 depending on the worker’s income, marital status and whether they have children.
Anyone earning $49,078 or less from wages or self-employment in 2011 should see if they qualify. To qualify for EITC one must file a tax return, have earned income from employment, self-employment or another source and meet certain criteria. The option to claim the tax credit is available for any household that meets qualifying criteria.
Many people will likely qualify for the first time this year due to economic changes in their income or changes in their marital or parental statuses according to the IRS. The agency estimates four out of five eligible workers currently claim their EITC.
“Especially in these tough economic times, programs like the Earned Income Tax Credit can be the ‘make or break’ factor for working families,” says Lowell Mayor Patrick Murphy. “Amazingly, a large number of eligible workers are missing out on what could be the equivalent of up two months’ worth of income. Anything we can do to promote awareness of the program here inLowellwill provide relief for our city’s working residents as well as the local businesses they patronize. On top of that, extra money in peoples’ pockets tends to ease the strain on social service programs. I’d call that an all-around win.”
The City encourages households to review the criteria on the IRS website (www.eitc.irs.gov/central/main) to determine if they qualify. Free File, available at www.irs.gov, lets households electronically file their returns and claim their EITC using brand name software products. Free tax preparation assistance is available at Community Teamwork, Inc., the Pollard Memorial Library, and theLowellSeniorCenter. Limited appointments are still available at these locations but residents can locate additional services by contacting the IRS directly at 1-800-906-9887.