EITC is one of the Largest Antipoverty Programs in America
The Earned Income Tax Credit (EITC), sometimes called EIC or Earned Income Credit is a refundable tax credit. Meaning, EITC can reduce the federal tax to zero and any unused credit is refunded. But, workers must file a tax return to get the credit even if their income is below the filing requirement. To qualify, workers must have taxable income from working for someone or from running a business or farm.
In Washington, DC, Capital Area Asset Builders (CAAB) manages the DC EITC Campaign. For more information, please visit http://bit.ly/1Lc65gI
The Impact of the EITC
- 26.7 million received over $65 billion in EITC for tax year 2014.
- The average amount of EITC paid out in 2014 was $2,440.
- Four of five people eligible for the credit claim it
- EITC lifted an estimated 6.5 million people out of poverty, including 3.3 million or half of them children
- EITC along with the refundable portion of the Child Tax Credit lifted an estimated 10.1 million people out of poverty, including 5.3 million children
- The cost of administering the EITC program ratio to claims paid is less than one percent
Basic EITC Eligibility Requirements
Determining eligibility for EITC is complicated. You must make over 20 separate determinations. This tool kit presents the basic qualifiers. Refer to the EITC Home Page on irs.gov IRS for more detailed information on who qualifies for EITC.
EITC Income Limits, Maximum Credit Amounts, and Tax Law Updates
Income and family size determine the amount of the EITC. The income amounts and the amount of EITC are adjusted for inflation each year.
- See the 2015 tax year income limits and maximum credits here
- See the income limits, maximum credit amounts, and tax law updates page on the IRS website for tax years, 2016, 2015, 2014 2013, and 2012
- The tables showing the full range of EITC for different filing statuses and income amounts is shown in the Instruction booklets for the Form 1040 series and in Publication 596, Earned Income Credit. Link to the Publication 596 on irs.gov for the tables or Link to Pub 596 SP, Crédito por Ingreso del Trabajo.
Who are we missing?
We estimate that four out of five workers claim the EITC they earned. Help IRS reach the potentially qualifying workers who miss out on thousands of dollars every year on EITC. Help us educate them about the credit and motivate them to join the four out of file who file and claim it. This includes workers who are:
- living in rural areas,
- self-employed,
- receiving certain disability pensions or have children with disabilities,
- without a qualifying child,
- not proficient in English,
- grandparents raising their grandchildren, or
- recently divorced, unemployed, or experienced other changes to their marital, financial or parental status
About Capital Area Asset Builders
Capital Area Asset Builders (CAAB) is a non-profit organization whose mission is to empower low- and moderate-income residents of the Greater DC Area to take control of their finances, increase their savings, and build wealth for a better future.
Connect with CAAB via our social media platforms:
- Twitter: @CAAB_GreaterDC
- Facebook: https://www.facebook.com/CapitalAreaAssetBuilders
- LinkedIn: https://www.linkedin.com/company/capital-area-asset-builders
