News Release
February 4, 2009

Earned Income Tax Credit available for low-wage earners

Those making less than about $42,000 and have children at home may be eligible for the Earned Income Tax Credit (EITC). If you qualify, you would owe less in taxes and may even get money back.

The Earned Income Tax Credit (EITC) is a way people who work but do not earn much money can build financial security, said Cole Ehmke, a specialist with the University of Wyoming Cooperative Extension Service.

 “Low-wage workers faced financial pressures before the recession,” he said. “Now, especially, they need to keep in mind the EITC can help relieve some of that pressure.”

Generally, a taxpayer may be able to take the credit for tax year 2008 if the taxpayer has an adjusted gross income of

• $38,646 ($41,646 married filing jointly) with two or more qualifying children;
• $33,995 ($36,995 married filing jointly) with one qualifying child;
• $12,880 ($15,880 married filing jointly) with no qualifying children.

The maximum amount of investment income a person may have is $2,950 for tax year 2008.

If a family with a child had less than $33,995 in income, then that family could get up to a credit of $2,917. If a family had two or more children, the credit would be as high as $4,824.

A credit is a direct reduction in the amount of tax owed – if someone owed $1,000 and got a credit of $500, that person would only owe $500. Or if a person owed $2,000 in taxes and got a credit of $2,500, he or she would receive a check for $500.

“The EITC is not just for people who have low-wage jobs. If people were unemployed for part of 2008, there is a chance they could be eligible for the EITC because their income was much lower than expected,” Ehmke said.

About 32,000 people in Wyoming are likely to claim the credit if participation is like in the past, according to Ehmke. The EITC is not automatic; a person has to file tax forms, including a special form for the EITC.

“The IRS estimates about one in four eligible taxpayers doesn’t claim the EITC,” Ehmke said.

Information on the EITC is available at IRS.gov. If you have access to the Internet and want to prepare your own tax return, go to www.irs.gov/efile.

Free in-person help with completing tax forms is available from volunteers staffing VITA sites (Volunteer Income Tax Assistance) around Wyoming. To locate the nearest VITA site, call the IRS at (800) 829-1040. Callers may experience delays.

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Contact: Steven L. Miller, Senior Editor
Phone: (307) 766-6342
E-mail: slmiller@uwyo.edu
Archived News Site http://uwadmnweb.uwyo.edu/UWAG/news.asp

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