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Income Tax Credit for Low-Income Individuals and Families

Information for Families

Published: December 4, 2014
Information About:
State/Local Child Support Agencies, Families, Other Public Partners, TANF (IV-A)
Topics:
Family Services & Referrals, Economic Stability/Job Services
Types:
Outreach/Brochures
Tags:
Earned Income Tax Credit (EITC), Internal Revenue Service (IRS), Toolkit & Training

In partnership with the Temporary Assistance for Needy Families (TANF) and the Internal Revenue Service (IRS), OCSE encourages eligible taxpayers to file for the Earned Income Tax Credit (EITC). Despite the success of the program, research reveals that perhaps 25% of eligible tax filers fail to claim it.

What is EITC?

  • EITC is a refundable tax credit that increases the income of low- and moderate-income working families by providing tax reductions and cash supplements.
  • As a federally funded anti-poverty initiative, the primary purpose of EITC is to help employed low-wage earners achieve financial self-sufficiency by offsetting taxes, supplementing wages, and making work more attractive than welfare.
  • Refunds received from EITC are not considered income for any federal or federally funded public benefit program, such as:
    • Medicaid
    • Supplemental Security Income
    • Supplemental Nutrition Assistance Program (food stamps)
    • Low-income housing
    • Most cash assistance payments received through state TANF programs

How does EITC help families?

  • EITC has been instrumental in closing the poverty gap for many of the nation’s working poor.
  • Preliminary reports for tax year 2013, indicates that EITC provided $62.9 billion in tax credits to over 28 million eligible families and individuals.
  • IRS reports that EITC is credited for lifting more than 6 million people out of poverty, including 3.3 million children during tax year 2013.

How do I claim EITC?

  • Taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. **Find information on locating free tax preparation sites by calling the IRS hotline at 1-800-906-9887 or visiting the IRS website.
  • Help with your tax return

Tax Year 2014 qualification levels:

  • Earned Income and adjusted gross income must each be less than:
    • $46,997 ($52,427 married filing jointly) with three or more qualifying children
    • $43,756 ($49,186 married filing jointly) with two qualifying children
    • $38,511 ($43,941 married filing jointly) with one qualifying child
    • $14,590 ($20,020 married filing jointly) with no qualifying children
       
  • Tax Year 2014 maximum credit:
    • $6,143 with three or more qualifying children
    • $5,460 with two qualifying children
    • $3,305 with one qualifying child
    • $496 with no qualifying children

Investment income must be $3,350 or less for the year.

Useful resources: