Without question, times are getting tougher for Americans.  With home values dropping and the cost of food, health care, and college education on the rise, American families are justifiably uneasy about their ability to make ends meet in an uncertain economy.  That is why it is particularly important for working people who earn less than $42,000 to learn about the Earned Income Tax Credit (EITC).

 The Earned Income Tax Credit was created in 1975, as a bipartisan plan, in part to offset the burden of social security taxes for low and middle income workers.  Since that time, it has grown to be one of the country’s most successful anti-poverty programs. 

 Last year, more than 23 million low and middle income working families received the Earned Income Tax Credit.  However, the Internal Revenue Service (IRS) estimates that 20 to 25 percent of the people who are eligible for the tax credit fail to claim this benefit each year.  That means millions of people do not get the credits that they have earned.

 To qualify, 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.  The Earned Income Tax Credit is available to working people who have incomes of less than $38,646 for individuals ($41,646 for married couples who file jointly) with two or more qualifying children, $33,995 for individuals ($36,995 for married couples who file jointly) with one qualifying child, or $12,880 for individuals ($15,880 for married couples who file jointly) with no qualifying children.  The Earned Income Tax Credit amounts vary and are determined by income and family size.  For the 2008 tax year, the maximum credit is $4,824 for a family with two or more children, $2,917 for a family with one child, and $438 for a family with no children. 

 General information on the EITC can be found by visiting the Internal Revenue Service website and clicking on the “Earned Income Tax Credit” link.  The website offers a number of resources, including a complete list of eligibility requirements and instructions for members of the military who have received combat zone pay.  The website also provides a valuable publication called Earned Income Credit, which explains how to file for an EITC and contains a worksheet to help you determine the amount of credit you could receive.  The publication is also available by calling 1-800-829-3676.

 Additionally, free tax preparation is available at volunteer tax preparation sites and at the Internal Revenue Service website through Free File, a program that provides free federal tax services to people who made $56,000 or less in 2008.  Free File is available 24 hours a day, seven days a week, but must be accessed through the IRS website.  For more information about Free File or to locate a tax assistance site, call the IRS at 1-800-829-1040.  People who are deaf or hard of hearing may call the toll-free TTY number at 1-800-829-4059.   

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