Some Oklahomans may qualify for Earned Income Tax Credit

With tax season just around the corner, many Oklahomans are busy gathering receipts and other documents so they can prepare their taxes.

“For those taxpayers who qualify for the Earned Income Credit, tax season may be a little easier to handle,” said Eileen St. Pierre, Oklahoma State University Cooperative Extension personal finance specialist.

“The Earned Income Credit, or EIC (also referred to as the EITC on the Internal Revenue Service Web site), is a special credit that low to moderate income workers can claim on their tax returns,” St. Pierre said. “Workers have to meet certain qualifications and do some calculations to see if they are eligible.  These credits can lower your tax bill or increase a refund.  Because the EIC is a refundable credit, you may still get some money back even if you didn’t have any tax withheld or don’t owe any tax to the IRS.  A taxpayer who qualifies can claim the credit even if you take the standard deduction. The EIC can be claimed by workers with or without qualifying children.” 

Taxpayers earning as much as $41,646 may qualify for the EIC.  For example, a married couple with two qualifying children and an income ranging from $12,060 to $18,740 could be eligible for the maximum tax credit of $4,824.  Qualifying children must be under the age of 19 at the end of 2008 and have lived in your main home for more than half of the tax year.  However, some college students may still qualify.  Totally and permanently disabled children of any age may also qualify.  Taxpayers with children will have to do some additional paperwork.  You must file Schedule EIC; this form is included in the 1040A Instruction Booklet that was mailed to you at the beginning of January.  You will either have to use Form 1040 or Form 1040A.

A taxpayer without qualifying children may claim the EIC if your adjusted gross is less than $12,880 ($15,880 if married filing jointly).  You are not required to file Schedule EIC.  You can use any 1040 Form, including Form 1040 EZ.

“In today’s tough economic times, it is more important than ever to take advantage of these tax credits,” St. Pierre said.  “Don’t let the fear of paperwork keep you from getting the money you deserve.”

The IRS has an EITC Assistant tool at www.irs.gov.  Type EIC in the search box and click on Earned Income Tax Credit Overview.  This Web site will walk you through the process to see if you are eligible and will even calculate the amount of your credit for you.  The IRS recently published a fact sheet that lists other tax credits for which you may qualify.  To access the fact sheet, type FS-2009-2 in the search box on the IRS Web site.  Some examples include the First-Time Homebuyer Credit, the Child Tax Credit and the Saver’s Credit (Credit for Retirement Savings Contributions).

Oklahoma workers also may be eligible for a state EIC. Oklahoma residents and part-year residents can claim a credit on their Oklahoma tax return equal to 5 percent of the EIC allowed on the federal return.

For more information about EIC, visit the IRS Web site at www.irs.gov.

Oklahoma State University, U.S. Department of Agriculture, State and Local Governments Cooperating: The Oklahoma Cooperative Extension Service offers its programs to all eligible persons regardless of race, color, national origin, religion, gender, age, disability, or status as a veteran, and is an equal opportunity employer.