EARNED INCOME CREDIT SHOULD BE USED

Earned income credit should be used. The earned income credit is designed to act as a cash infusion to low income families. In fact, some experts have called it “One of the largest and most studied antipoverty programs in the United States.” Yet far too many taxpayers aren’t aware of the IRS credit, according to a survey released this week. Some 44% possibly eligible for the credit—by making less than $40,000 a year—were not aware of it, according to a new survey from the tax preparation company Jackson Hewitt. More than half of the same group either said they did  not qualify (20%) or didn’t know if they qualified (33%) according to the survey. The results reinforce past research on lagging claim rates for a program that was started 45 years ago. Earned income credit should be used.

The current value of the tax credit for working families ranges between $529 and $6557, depending on the number of children and marital status. The most an eligible individual can make is $50,162 a year while the most a married couple can make is $55,952 a year, according to the Internal Revenue Service’s rules. “It’s an unfortunate statistic,” according to Jackson Hewitt, the survey polled 1000 people. Any untouched Earned Income Credits might mean taxpayers are also not filing returns correctly. Millions of taxpayers are leaving millions of dollars off their returns for no legitimate reason. There may be some survey participants who didn’t know the tax jargon but were still taking advantage of the EITC when sending their earnings information to a preparer or tax software. It’s a shame to miss out on deserved money, but the stakes are high when it comes to this tax credit.

The EITC and the child tax credit kept 8.9 million people out of poverty in 2018, the U.S. Census Bureau said last fall. The agency said the only public program keeping more people out of poverty was Social Security, which kept 27.2 million from slipping into poverty.

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