Treasurer: Apply for Earned Income Tax Credit
From the Office of Kentucky State Treasurer Todd Hollenbach:
Kentucky Treasurer Todd Hollenbach is encouraging more Kentuckians to apply for the Earned Income Tax Credit (EITC), a refundable federal tax credit for low and middle income working individuals and families.
“The EITC is a benefit for low and middle income families, and I want to make sure every eligible Kentuckian takes advantage of it,” Hollenbach said. “In addition, it’s good for the economy because research indicates that 97 percent of this money will go right back into Kentucky businesses, just the kind of economic stimulus our communities need.”
Eligibility for the EITC and the amount of the credit is based on income and family size. For example, a household with two parents and three or more children can earn up to $50,000 and still qualify for credits as high as $6,044.
In tax year 2012 Kentuckians filed 410,000 EITC claims for a total of $912 million in benefits statewide. The average credit was a little over $2,200. Unfortunately, an estimated 15 to 20 percent of eligible workers still do not claim their EITC benefits, according to the Internal Revenue Service, mostly due to lack of awareness.
The EITC is designed to help people afford to work by offsetting the rising costs of child care, transportation, and utilities that working families need. Families get it by filing their taxes, so it comes when heating costs are the highest and "extra" job – seasonal jobs, outdoor labor, etc. – opportunities are often the lowest. The EITC fills a gap to keep families stable and able to work.
“For earners in lower-wage jobs, the EITC can be a valuable income source,” said Treasurer Hollenbach. “Through the collective efforts of groups across the state, hundreds of millions of dollars can be put back in the hands of hard-working Kentuckians, increasing their personal financial status, creating a more vibrant and prosperous state. The challenge is to make sure that eligible taxpayers are aware of the credit and its numerous benefits.”