Building Economic Futures for Americans with Disabilities
Real Economic Impact Tour
For Individuals with Disabilities & Their Families
What is the Earned Income Tax Credit?
Approximately 20% of the United States population lives with some level of disability. Over one-third of adults with disabilities live in households with income of $15,000 or less compared to only 12% of those without disabilities. To help combat this startling statistic, the Real Economic Impact Tour provides support to people with disabilities and their families through financial education. One little-known benefit run by the federal government is called the Earned Income Tax Credit (EITC).
Community Partners at Volunteer Income Tax Assistance (VITA) sites, throughout the county can provide you with the tools and resources to learn more about the EITC. If you qualify, the EITC will lower or eliminate any taxes owed. If you are not obligated to pay any taxes or if the credit is larger than any taxes owed, you will receive a cash payment ("refund") from the Internal Revenue Service (IRS) after filing a tax return. In such instances, the government is providing you additional money beyond what you would be paid at your job to encourage work, offset Social Security withholding, and to provide support which reduces poverty and increases financial independence.
Qualifying for the EITC
To qualify for the EITC, you (or your spouse) must have a job, have wages below a certain level, and file a federal tax return to the IRS. There are additional rules and restrictions as well. For tax year 2006, in order to qualify for the EITC, workers with no children must have earned income below $12,120. If you have one child, you must have an earned income below $32,001 to be eligible. If you have two or more children, your income must be below $36,348 in earned income to qualify for the EITC (these limits are $2,000 higher in each category for workers filing a married joint tax return). The EITC does not count as income for determining eligibility for such benefits as Medicaid, Supplemental Security Income (SSI), food stamps, federally assisted housing or Temporary Assistance for Needy Families (TANF). The amount of EITC received does not count as a resource in the month received or the next month for Medicaid, TANF, Child Care Subsidies, Head Start or Low Income Home Energy Assistance Program (LIHEAP). It does not count as a resource for nine months after the month of receipt for SSI and 12 months after the month of receipt for food stamps. Even after these time frames, there will be no problems if your resources are below the designated limits. Immigrants who are legally authorized to work may also claim the EITC.
How do I apply for the EITC?
To claim (apply for) the federal EITC, you must file a tax return with the Internal Revenue Service, usually by April 15th. You will need to complete one of three forms: Form 1040EZ, Form 1040A, or Form 1040 and submit it to the IRS.
For more information, and to see if you qualify, go to http://apps.irs.gov/app/eitc2006/.