In 2011, federal tax credits will mean more for working families than ever before. As the economy struggles to recover from the recession, many working families can receive valuable federal tax credits. These credits can help you pay bills and meet your children’s needs in the face of cutbacks at work and unemployment. Working individuals and families need to know that help may be available when you file your 2011 tax return. You also need to know how and where to get assistance.
If you worked full-time or part-time during 2010, and you had low to moderate income, you may qualify for the Earned Income Credit. You may also receive the Child Tax Credit if you had children living with you for at least half of the year. If you qualify you owe less in taxes and you may get cash back. Also, some people who don’t owe taxes can get the Earned Income Credit. However, to get these credits, you must file a tax return.
The Earned Income Credit could put as much as $3,050 into the pockets of a family with one child, or send as much as $5036 to a family with two children, or up to $457 for a worker with no children.
This year workers raising three or more children in their home in 2010 can get an EIC of up to $5,666. While the amount varies with your circumstances, the IRS estimates that 20-25 percent of eligible taxpayers fail to claim the credit. The extra dollars that taxpayers can get through EIC can make their lives a little easier. Some individuals and families may qualify for the first time because of unemployment or other changes in their financial, marital or parental status during the past year.
Some examples of workers who can qualify for the EIC include: workers who have one child in their home and had income of less than $35,535 (or $40,545 for married workers); workers raising two children with income of less than $40,363 (or $45,373 for married workers); or workers with no children who earned less than $13,460 (or $18,470 for married workers). Workers who were raising three or more children in their home in 2010 and had income of less than $43,352 (or $48,362 for married workers) could get an EIC of up to $5,666. Workers within these categories should check to see if they qualify. Workers with investment income exceeding $3,100 in 2010 may not claim EIC.
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