The director of the Earned Income Tax Credit (EITC) Program for the Internal Revenue Service is reminding low-income Iowans to apply for the special tax benefit. Verlinda Paul says last year more than 24 million Americans claimed nearly $48-billion from the E.I.T.C.
“In the state of Iowa, that included 185,000 claimants for 330-million dollars,” Paul said. There are still thousands of Iowans that are eligible for the E.I.T.C., but fail to claim it and miss out on hundreds or even thousands of dollars. The I.R.S. believes one in four eligible families miss out on the E.I.T.C. every year. “We believe with the economic downturn, there may be even more potential claimants this year,” Paul said.
Many of the people that fail to claim the E.I.T.C. don’t make enough money to be required to file a tax return, but they must do so to claim the tax credit. Last year, in Iowa, the average E.I.T.C. return was $1,800. The maximum credit this year is $4,800. Eligibility for the tax credit depends on income and family size.
“For a family of four, the income level needs to be below $42,000 a year,” Paul said. “For a single individual, with no children, the maximum income level is $13,000.” Iowans who are eligible for the E.I.T.C. can also get free help in preparing their tax returns.
Community organizations that coordinate those services will hold press conferences today to raise awareness about the tax credit. Those events will take place in Cedar Rapids, Davenport and Waterloo.