Health and Family Services Cabinet
Earned Income Tax Credit Can Boost Families’ Income; Thousands of low-income Kentuckians qualify but don’t file
FRANKFORT, Ky. (March 13, 2006) – Families and individuals who meet certain guidelines could get more from their 2005 tax returns or regular paychecks by taking advantage of the Earned Income Tax Credit.
With the April 17 tax filing deadline weeks away, the Kentucky Cabinet for Health and Family Services is reminding Kentuckians, including those receiving welfare assistance, that they may qualify for the tax credit.
“This can be a valuable income source for earners with lower-wage jobs,” said Kelly Jackson, director of the cabinet’s Division of Family Support. That includes families who receive Kentucky Transitional Assistance Program (K-TAP) benefits.
Kentuckians who qualify for the EITC and file a federal tax return will owe less in taxes and could get cash back. The EITC is for single or married parents who work full or part time. Some adults without children also qualify.
About 331,000 Kentuckians received more than $590 million through the EITC for the 2004 tax year, according to U.S. Internal Revenue Service estimates. Still, thousands of eligible families, including many immigrant workers, do not file for the EITC.
“We’re trying to spread the word so families meeting the criteria won’t leave that money unclaimed,” Jackson said.
The credit is determined by scale and is typically received as part of the individual’s federal income tax refund. Some workers may choose the Advance EITC, which adds the credit to their paychecks year-round.
Taxpayers might be eligible for the EITC if they earned:
• less than $31,030 and have one qualifying child ($33,030 if married filing jointly);
• less than $35,263 and have more than one qualifying child ($37,263 if married filing jointly);
• less than $11,750 and have no children ($13,750 if married filing jointly).
Customers applying for services at a family support office are given detailed information about the EITC and a 2005 earned income credit tax form, Jackson said. Handouts are available in several languages, including Spanish, Bosnian and Vietnamese. Clients whose benefits are discontinued because of earnings are also informed of the credit.
An Internet-based program, the EITC Assistant, can help taxpayers determine eligibility. The program is available in English and Spanish. Log onto http://www.irs-eitc.info/SPEC/ to find the program and other information about the credit.
The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most K-TAP payments.
“This credit can supplement other forms of assistance and is extremely valuable for parents who are stretching their paychecks,” Jackson said.
Special rules make it easier for hurricane victims, military personnel serving in combat zones, members of the clergy and those with disability retirement income to claim the EITC.
EITC-eligible families may qualify for free tax preparation and electronic filing through the Free File Alliance. Learn more about Free File online at on the Kentucky Department of Revenue: http://revenue.ky.gov/freefile.htm.
Also, free tax preparation and filing assistance is available in many communities across the state. Trained volunteers can help identify eligibility for EITC as well as other tax credits. Taxpayers can locate the site closest to them by calling the IRS helpline, (800) 829-1040.
The 2006 tax filing deadline is Monday, April 17, since April 15 falls on a Saturday.
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