The IRS has an online program, the Earned Income Tax Credit Assistant, to help these filers.īy answering some questions and providing basic income information, the online program will help you determine your correct filing status, whether your children meet the credit's requirements and will give you an estimate of the amount of credit you may receive. It is rather complicated, and because eligible taxpayers usually don't have much cash to spare, they generally cannot afford professional help in filing for it. There is, however, a drawback to the credit. That credit will erase your $800 bill, but you lose the extra $200.īut a refundable credit, which the EITC is, will allow you to get that extra $200 back as a refund from the Internal Revenue Service. For example, you owe $800 and have a $1,000 credit. Most tax credits are nonrefundable, meaning they sim.ply zero out a tax bill. It even can produce a tax refund for eligible filers who had no tax liability. This tax break returns to qualified individuals a portion of the taxes they paid. The earned income tax credit, or EITC, can be a great benefit for workers who don't make much money or to those who did work but then lost a job.
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