Millions await qualifying taxpayers

By Jolene Guzman, Staff Writer
Sunday, February 01, 2009 | 6 comment(s)

1 in 4 eligible workers don’t file for credit

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Coos County residents are due millions of dollars? There’s no need to raise taxes or wait for an act of Congress to get them.

Just file your taxes.

More specifically, find out if you are eligible for the earned income tax credit. The credit was created in 1975. It’s intended for people who work but don’t make much money. The Internal Revenue Service calls the it one of the largest anti-poverty programs in the country.

Commissioner Nikki Whitty said she became aware of the lack of filers a few years ago at a forum sponsored by the Annie E. Casey Foundation, a human service group. Since then, Whitty has made it her mission to spread awareness.

“It’s money that is available to be spent in the local economy,” Whitty said.

She said the extra money could help them start a savings account or take care of expenses they couldn’t otherwise afford.

“It can put money in your pocket even if you didn’t have any income tax withheld,” said Bill Brunson, an IRS spokesman. 

For tax year 2007, more than 230,000 Oregonians received the credit, totaling almost  $413 million. But 25 percent of those who are qualified for it don’t file for the credit, according to the IRS. Some eligible taxpayers who routinely do not claim the credit are childless workers and non-traditional families, such as grandparents raising grandchildren.

Coos Bay resident Jenny Walker, 23, said she was among those unaware they might qualify for the tax credit. The single mother, with a 2-year-old daughter, works at Wal-Mart and made about $18,000 in 2008. She could get up to an almost $3,000 credit this year.

“It would help a lot, to pay off bills and stuff,” Walker said.

People don’t have to have children to qualify. Individuals who make less than $12,880 or married couple without children earning less than $15,880 can file for the credit and get as much as $438 back for 2008.

One of the main reasons qualified people don’t collect the credit is that they don’t file a tax return at all, said Diane Kimes, South Coast district coordinator for the AARP tax aide program.

If an individual makes less than $8,950 a year or a married couple makes less than $17,900 a year, they aren’t required to file tax returns. With no legal reason to file a tax return, many people don’t.

“They don’t realize they are shooting themselves in the foot,” Kimes said.

Depending on income, qualified filers could get back up to $4,800 this year. The average credit falls between $1,900 and $2,000, Brunson said.

Kimes said though it is called an anti-poverty program, people shouldn’t look at it as charity or welfare. She said it is an incentive. The more money a person makes, up to a certain point, the bigger the credit. Kimes said people working low-income jobs could get a big boost from the credit.

 “I’ve had women with children start crying saying ‘I’m going to get some of that back?’” Kimes said. “At that income level everything helps.”

Brunson said people can collect the credit for 2008 and retroactively for the two years before that.

AARP site coordinator Teresa Slechta at College Park Community Church in Coos Bay said the economic downturn and numerous layoffs in 2008 may increase the number of people who can take the credit this year.

“If people were laid off or just worked part of the year, they should check and see if they qualify,” Slechta said.

Kimes said her motto is “When in doubt, find out.”

“The IRS isn’t going to call and say, ‘Hey we have $50 of your money. You want it back?’” Kimes said.
Will you qualify?


The Earned Income Tax Credit is for lower income workers. Here are guidelines on income thresholds:


Income must be less than:


• $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. 


• Investment income must be $2,950 or less for the year.


Benefits


Maximum credit for 2008 is: 


• $4,824 with two or more qualifying children.


• $2,917 with one qualifying child.


• $438 with no qualifying children.


Basic qualifications


All workers claiming the EITC must:


• Have a valid Social Security number.


• Not file as “married filing separate.”


• Not file Form 2555 or Form 2555-EZ (related to Foreign Earned Income).


• Meet the investment income limitation ($2,950 for 2008).


• Have earned income.


• Not be the qualifying child of another person.


• Generally, be a U.S. citizen or resident alien for the entire year.


Source: Internal Revenue Service

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The End is Near wrote on Feb 5, 2009 7:14 PM:

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.

okay wrote on Feb 3, 2009 5:14 PM:

Agree Joe sixpack!!!

Why should I bother to pay taxes anymore when people who dont pay them get more money back then I do!

Eddo wrote on Feb 1, 2009 7:29 AM:

My spouse works for H&R Block and believes the Earned Income Credit is one of the biggest giveaways in this country.

People work only long enough to qualify for the Credit, then quit and live on welfare for the rest of the year.

Eddo wrote on Feb 1, 2009 7:27 AM:

As the spouse of someone who works for H&R Block, the Earned Income Credit does as much toward influencing people to work less. Time after time people come into the office with just the bare minimum number of work hours/income to qualify.

The begin working in January and work only enough to become qualified for the Earned Income Credit, then quit and draw welfare for the rest of the year.

This is one of the biggest giveaways in the country!

North Bend Guy wrote on Jan 31, 2009 12:08 PM:

This is great article, as a human service worker I have been aware that earned income tax credits have be under used for years. Not only does this help individuals and families it can pump hundreds of thousands of dollars into local economies. Its a kind of stimulus package in itself! I am a tax payer and encourage anyone who is eligible for an earned income tax credit to apply for it and spend it!

Joe Sixpack wrote on Jan 31, 2009 11:07 AM:

If you don't pay money in you shouldn't get money back!!


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