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January 1, 2011
February 3, 2010
The tax season has arrived and for families and communities across Minnesota, the Earned Income Tax Credit (EITC) will help family budgets and stimulate local economies.
The federal Earned Income Tax Credit (EITC) brought $531 million to Minnesota in 2009 and promises to bring a similar amount to the state’s eligible working families during this tax season. This influx of federal dollars is important to families and communities across Minnesota. The EITC encourages work, strengthens families, stimulates local economies and reduces the tax burden on low-income families. Unfortunately, close to 20 percent of those eligible for this credit don't claim it.
The EITC is a federal income tax credit that supports those who work in low-wage jobs, especially those raising children. It helps parents meet their children's basic needs, as well as pay off debt and build assets to create a better future for their children. Nationally, it lifts millions of working families out of poverty each year. It is a refundable credit, meaning any value over what is owed to the IRS is returned to the tax filer as a refund. The EITC also creates more fairness in terms of overall tax burden on low- and moderate-income workers who pay a greater share of their income in sales and payroll taxes than higher income workers.
About 296,000 Minnesota households claimed the EITC in 2009. For this tax season, the EITC is worth up to $5,657, depending on one’s filing status and number of children. Minnesota households who claim the federal EITC also qualify for the state Working Family Credit (WFC). CDF and its many partners have worked for years to raise the visibility of the EITC and WFC, urging eligible families to claim these credits and make use of free tax preparation sites statewide.
Individuals and married couples are eligible for both the federal EITC and the state WFC based on income and the number of children they have. Married couples with three or more children who earned less than $48,279 in 2009 can claim the credits. Single adults with three or more children who earned less than $43,279 can also claim the credits. The credits also are available to individuals and couples who have one or two children or no children. For more information on the EITC and WFC and to find out if you may be eligible, visit www.bridgetobenefits.org.
To find a free tax preparation site near you, call United Way 2-1-1. Dial 2-1-1 or from a cell phone dial 651-291-0211 (1-800-543-7709 outside of the metro area) or click here.