Updated EITC guide helps taxpayers claim hundreds, even thousands!

Consumer Action has again updated one of our core publications, Get Credit for Your Hard Work. Published annually since 2004, the fact sheet is designed to help eligible workers claim the Earned Income Tax Credit (EITC), which, in 2019, can put as much as $6,431 back into the pockets of low- and moderate-income working parents filing taxes for 2018. Qualifying workers without children are eligible for a credit of up to $519. The publication is available in English, Spanish, Chinese, Vietnamese and Korean.

Created in 1975, the EITC is widely regarded as the federal government’s most effective antipoverty program. (Nearly 30 states and Washington, DC, also provide an Earned Income Tax Credit to state taxpayers who qualify, as do some local governments.)

Unfortunately, the program remains underutilized, with only an estimated four out of five eligible workers claiming the EITC they’re entitled to. The demographics missing out on the credit include those who live in rural areas, are self-employed, are childless, are not proficient in English, or are grandparents raising their grandchildren. Unlike some other credits, qualified taxpayers can receive money through the EITC even if they don’t owe any taxes.

With the average credit being over $2,400, a household that leaves this money on the table forgoes the opportunity to build savings, pay down debt, buy necessities, make needed home and auto repairs, and otherwise improve their financial wellbeing. In an effort to help taxpayers avoid this, the IRS has been educating the public about the tax credit over the last 13 years through national EITC Awareness Day. This year, the government agency, consumer groups and educators will be holding live events, publishing articles, generating media coverage and otherwise spreading the word about the EITC (as well as the Child Tax Credit, the Additional Child Tax Credit and the American Opportunity Tax Credit) throughout the day of the event (Jan. 25.)

The IRS is encouraging community organizations, employers and others to join them in getting the word out this year. For sample articles, social media messages, posters and other materials to do so, the IRS offers a Partner's Outreach Toolkit and Quick EITC Outreach kit.

There are no major changes to the EITC for tax year 2018 (although, as usual, income limits and credits have edged higher to keep pace with inflation). The main change for the 2019 tax filing season, which will affect all individual (personal) filers, is the adoption of a single, shorter and simpler Form 1040 that will replace the three versions—1040, 1040A and 1040EZ—that were used in the past.

The IRS will begin accepting tax returns on Jan. 29, with returns due by April 15 (unless you live in Maine or Massachusetts, where returns are due April 17 due to state holidays on the 15th and 16th). You must file a return in order to receive the EITC.

Get Credit for Your Hard Work for the 2018 tax year (2019 filing season) is available for online reading or free PDF download in all five languages.