Earned Income Tax Credit or EITC
Tax season is here, and an important consideration for many individuals filing their tax returns is the Earned Income Tax Credit, or EITC. The EITC is a tax credit available to anyone who files a federal income tax return, and who earned taxable earned income up to certain limits in the last year.
According to the IRS’ website, “earned income” includes wages, salaries, and tips, union strike benefits, long-term disability benefits received before minimum retirement age, earnings from self-employment under many circumstances. Social Security benefits, unemployment benefits, alimony, and child support are generally not considered earned income.
The EITC is a refundable credit, which means it can not only decrease taxes owed, but can be refunded to a taxpayer who does not owe taxes. The credit is available to taxpayers whose earned income and adjusted gross income are below certain limits, which are available at https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/do-i-qualify-for-earned-income-tax-credit-eitc.
Filing a tax return can be confusing and challenging, but free filing help is available through the Volunteer Income Tax Assistance program, or VITA. You can find additional information about the EITC, VITA, and other resources for help with income taxes on Legal Aid’s website at http://www.lawv.net/Resources/Self-Help-Library/Consumer/Earned-Income-Tax-Credit-EITC-Information.