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Don't Overlook Earned Income Tax Credit

Program Benefits Lower-Income Wage Earners

February 25, 2006

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New York City Mayor Michael R. Bloomberg kicked off the fourth year of the city's Earned Income Tax Credit (EITC) Campaign with the opening of more than 40 free tax preparation centers and an expanded partnership with the nation's two largest paid tax preparers, H&R Block and Jackson Hewitt.

New York's effort to promote the Earned Income Tax Credit is one of the largest in the country, but you don't have to live in New York to qualify.

The tax credit returns millions of tax dollars to working families. In some cases, families earning less than $37,000 can receive up to $6,000 at tax time from the federal, state and New York City EITC.

Qualifying taxpayers can file retroactively for up to three years, sometimes doubling or tripling refunds.

Full-time and part-time workers, including self-employed workers, who are legally authorized to work in the United States are eligible for the tax credit. A breakdown of eligibility is below.

Are You Eligible?

The IRS offers a free online tool that will help you determine if you qualify for the Earned Income Tax Credit.

"The IRS encourages all who qualify to claim this important benefit," said Internal Revenue Service Commissioner Mark W. Everson. "In particular, I commend the thousands of volunteers across the country and here in New York City who help taxpayers navigate the complexity of our tax code and claim this credit."

The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families.

Congress originally approved the tax credit legislation in 1975 in part to offset the burden of Social Security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

New York City's Earned Income Tax Credit partnership with H&R Block and Jackson Hewitt offers discounted tax preparation to income eligible members of six of the City's labor unions. H&R Block is also extending that program to EITC-eligible residents in 19 neighborhoods targeted by the city.

Similar programs exist in some other cities.

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