It might not have generated quite the media hoopla of say, Groundhog Day, but yesterday marked the launch of the Earned Income Tax Credit Awareness Day.
A Treasury Department press conference -- featuring Treasury Secretary Henry M. Paulson, Treasurer Anna Escobedo Cabral and Internal Revenue Service Commissioner Mark W. Everson -- kicked off the national campaign to inform taxpayers about the credit available to working families, as well as the availability of free tax help.
The Earned Income Tax Credit provides a refundable credit of up to $4,536 for eligible families. EITC claimants are eligible for free tax preparation services provided at 12,000 volunteer sites nationwide, or they can also link to Free File through www.IRS.gov.
During the 2005 tax year, more than 22 million returns received over $41 billion from the credit. However, the IRS also estimates that as many as 25 percent of eligible taxpayers fail to claim the tax credit.
Eligible people who fail to claim EITC include Spanish speakers, individuals who are self-employed or have service jobs in private households, childless taxpayers, rural residents, and recipients of other types of public assistance such as food stamps.
The credit was created in 1975 in part to offset the burden of Social Security taxes and to serve as a work incentive. The amount of the credit varies but it is generally determined by income and family size.
The EITC Assistant, an interactive took available at www.irs.gov/eitc, can help taxpayers determine if they qualify for the credit.
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