The IRS, Department of Treasury and community partners are working together to highlight the availability of this important tax credit that could be critical to many Illinois families. January 29, 2010 has been designated as EITC Awareness Day to emphasize the importance of this credit. EITC, which is in its 35th year, is one of the federal government’s largest benefit programs for people who work but don’t earn a lot of money.
Last year, nearly 24 million people nationwide received $49 billion in EITC benefits. For Illinois, this means more than 910,000 Illinois families claimed over $1.9 billion in EITC with an average of about $2,107 per family added to their tax refunds.
“EITC awareness is so important now because people who were laid off last year or who went from full-time to part-time work may be eligible for the credit for the first time,” said Sue Hales, IRS spokeswoman for Illinois. “The EITC could substantially increase their refunds.”
Not everyone who is eligible for the credit claims it. Historically, one out of four taxpayers eligible for the EITC fails to claim it. People who fail to claim the credit include workers without children, people whose earned income falls below the threshold to file a tax return, farmers, rural residents, people with disabilities and nontraditional families such as grandparents raising grandchildren.
“You have to file a federal tax return to claim the EITC,” said Hales. “We want to encourage everyone who thinks they could be eligible for the credit to check it out. It’s too valuable of a credit to overlook.”
Eligibility for the EITC depends on earned income and family size, among other tests. Workers that are single or have no children may be eligible for the credit, although for smaller amounts. Investment income must be $3,100 or less. Children must meet certain age, relationship and residency requirements. Filers with no children must be at least 25 years old but under age 65.
For tax years 2009 and 2010, the American Recovery and Reinvestment Act created a new category for families with three or more children. Below are the tax year 2009 maximum EITC amounts and the qualifying income amounts:
Maximum EITC Amounts
- $5,657 with three or more qualifying children
- $5,028 with two qualifying children
- $3,043 with one qualifying child
- $457 with no qualifying children
Qualifying Income Amounts—Earned Income and adjusted gross income (AGI) must be less than:
- $43,279 ($48,279 married filing jointly) with three or more qualifying children
- $40,295 ($45,295 married filing jointly) with two qualifying children
- $35,463 ($40,463 married filing jointly) with one qualifying child
- $13,440 ($18,440 married filing jointly) with no qualifying children
To help EITC-eligible tax filers who may not be able to come into an IRS office during the work week, five IRS offices in Illinois will open three Saturdays (Jan. 30, Feb. 6 and Feb. 20) from 9 a.m. to 2 p.m.
- Chicago IRS Office, 230 S. Dearborn Street
- Galesburg IRS Office, 2066 Windish Drive
- Orland Park IRS Office, 14479 S. John Humphrey Drive
- Schiller Park IRS Office, 5100 River Road
- Springfield IRS Office, 3101 Constitution Drive
In addition, community organizations throughout Illinois have set up hundreds of free tax help sites staffed by trained volunteers where people who earned less than $49,000 can get assistance claiming the EITC and other tax breaks. The Tax Counseling for the Elderly (TCE) program offers free tax help to taxpayers who are 60 and older. To find the volunteer tax site closest to you, call the IRS at 1-800-906-9887. For AARP Tax-Aide sites, call 1-888-227-7669.
“Volunteer tax assistance sites are a great source of help during tax time,” Hales said. “People can have their federal tax returns prepared and e-filed for free from convenient locations. Many sites are open evenings and weekends.”
EITC claimants can also use IRS Free File if they wish to prepare their own returns. Free File is only available through IRS.gov. It offers a choice of free tax preparation software that guides taxpayers through the process and helps them claim the tax credits and deductions for which they are eligible.
Taxpayers can find a wealth of EITC information on IRS.gov, including online tools like the EITC Assistant, an easy-to-use interactive tool to help determine EITC eligibility. The EITC Assistant also is available in Spanish.
More than 65 percent of EITC returns are prepared by a third party. The IRS urges taxpayers to choose a reputable tax preparer to avoid problems that come with an inaccurate tax return. The agency also urges tax preparers to follow due diligence requirements when preparing an EITC tax return. More information is available at www.irs.gov/eitc.