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Millions of Americans forgo critical tax relief each year
by failing to claim the Earned Income Tax Credit (EITC),
a federal tax credit for individuals who work but do not
earn high incomes. Taxpayers who qualify and claim the
credit could pay less federal tax, pay no tax or even
get a tax refund. In 2004, an estimated 21 million taxpayers
received approximately $37.5 billion in EITC.
“The EITC helps hardworking taxpayers, yet each
year an estimated 25 percent of people who qualify don’t
claim the credit,” said David R. Williams, Director,
Earned Income Tax Credit at the Internal Revenue Service.
“That’s why the IRS is working to make it
easier for taxpayers to understand whether they are
eligible.”
To claim the credit, you do not need to have children.
If you have children, they must meet the relationship,
age and residency requirements to claim the credit.
You can elect to have your
nontaxable combat pay included in earned income for
the earned income credit. Combat pay, Nontaxable. If
you were a member of the U.S. Armed Forces who served
in a combat zone, certain pay is excluded from your
income.
Easy Ways to Determine Whether You Qualify
There's a lot to know about qualifying for EITC, the best way to find out if you qualify is to use the EITC Assistant at www.irs.gov.
By answering questions online about yourself, your children,
your living situation and your income, this tool will help you determine if you are likely
to qualify for the EITC. You will see the results of
your responses right away on your computer screen. This
tool is also available in Spanish.
Visit www.irs.gov
for more information.
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