Often, taxpayers qualify to claim the Earned Income Tax Credit (EITC), however they forget when they file their return. The IRS reports that one out of every five qualified taxpayers don’t claim the credit. Like all tax credits, the EITC decreases the amount of taxes you owe the IRS, and depending on the number of dependents and other circumstances, you may even be eligible for a refund! In some cases, the refund may be more than you paid in taxes, so don’t forget to claim the EITC when eligible. It’s a very important tax credit that can save you a ton of money. Who doesn’t love extra cash back?
Explaining the EITC
The EITC is a tax benefit for low-to-moderate income families that can reduce tax debt and sometimes fully eliminate any money owed. During the last tax season, approximately 26 million taxpayers claimed the EITC and were able to put over $63 billion back in their household income. On average, that’s $2,470 per tax return!
When you file this year’s tax return, don’t forget to check your eligibility to claim the EITC. If you determined that you forgot to claim the credit in previous tax years (up to three year prior) and you were eligible, the IRS may still provide you with a refund. Let them know as soon as possible, and remember to claim the EITC whenever you can!