The Earned Income Tax Credit is one of the perks offered by the United States federal government. This is a refundable type of income credit that goes to people who earn a low or moderate annual wage. Those who are eligible for this benefit are working citizens and couples and the numbers of children is an important aspect as well. One such credit can rise to thousands of dollars which would be enough to pay off overdue taxes or loans.
Last year in Detroit alone, there were 94,379 families who benefited $305 million thanks to The Earned Income Tax Credit. However, on the other hand, there were other 26,000 households who were eligible but didn’t follow the protocol to release them. The unclaimed tax credit cash amounted to $80 million. In order to unlock this benefit, citizens with low or middle annual income have to fill in a tax return.
These large income credit refunds are so awaited in the tax season, that many businesses spend money on commercials where people are advised on how to use their tax cash. This is because one struggling American family can make a lot with a new budget of up to $4,000. The mayor of Detroit, Michigan, Mike Duggan, stated that the Earned Income Tax Credit could help many working families and couples to save their homes by paying their overdue bills.
Even though this kind of credit cash has been an active program for around 40 years, there are still many Americans who are eligible yet not aware of it. There are many reasons why people are not taking advantage of this. For instance, some of them have applied in the past for it and weren’t qualified for the refund at the time. After a while, they might have become eligible, but they are not reapplying. Almost 30% of those eligible for the program are new to the credit each year.
The official source of information for the citizens regarding the tax returns is the IRS Publication 596. However, the document has 38 pages of professional terminology that is hard for some working families to grasp. This is why Americans are encouraged to use the Volunteer Tax Assistance program that offers free of charge counseling for households that earn less than $54,000 a year.
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