Last Updated on April 14, 2022 by BVN
Phyllis Kimber Wilcox |
As the 2022 tax season draws to a close, many are rushing to file state and federal tax returns by the April 18 deadline.
There are several programs offering tax relief to low- and moderate-income families at both the state and federal levels.
The Earned Income Tax Credit (EITC) helps low- to moderate-income families by reducing the amount of taxes they owe the government allowing them to keep those funds for themselves. It also helps individuals, who may receive money from the government designed to assist low- income families and individuals, who have earned income during the tax year.
California introduced its own EITC–the California Earned Income Tax Credit (CalEITC) in 2015 to supplement the federal EITC. Since being introduced, the state has made more people eligible for the credit while also increasing the value of the credit.
Here in California the nonprofit organization Golden State Opportunity supports a program titled CalEITC4ME. The nonprofit facilitates outreach to low-to-moderate-income residents to enroll them in the CalEITC program.
“Tax credits are extremely successful at lifting families–especially children–out of poverty. For example, in 2018, the federal Earned Income Tax Credit (EITC) lifted about 5.6 million people out of poverty, including about 3 million children, and the expanded Child Tax Credit cut child poverty by 30%,” said CalEITC4Me spokesperson Aonya McCruiston. “ Tax credits also boost the economy and encourage people to work.”
The EITC is said to have aided families greatly during the beginning of the pandemic and the benefits are increased for the current tax year.
According to the IRS, basic requirements to qualify for the EITC at the federal level are:
- You must be a low to moderate income worker and have worked and earned income during the year for which you are filling
- Your earned income is under $57,414
- You have investment income below $10,000 in the tax year 2021
- You have a valid Social Security number
- You are a U.S. citizen or were a resident alien all year
- You did not file Form 2555 (related to foreign earned income)
- Parents with ITIN’s or individual taxpayer identification numbers whose children are citizens may also be eligible to claim federal EITC
Individuals Without Dependents
If you have earned income for the year you are filing, you may be entitled to the earned income tax credit even without qualifying dependents. For individuals without dependents the tax credit is $1502. To be eligible you must be at least eighteen-years-old if homeless, or nineteen-years-old, if not.
In addition, you are required to have a valid social security number used for employment and issued before the tax return you are filling. This includes social security cards which are valid for work issued by the Department of Homeland Security.
You may apply for EITC if you are married filing jointly, head of household, qualifying widow or widower, or single though some stipulations may apply.
Differences in qualifications
There are, however, differences in how EITC tax credits are applied. For example, there are different requirements for military families, clergy, etc. There are also different filing requirements for those who have family members who are disabled. That information can be found here.
Don’t miss out because you think your low income does not require you to file
Those whose incomes are so low it does not require them to file income tax returns could miss out on the benefits they could receive if they do not file for EITC. If you are among those who do not usually file taxes, go to the IRS website and follow the link to file for the tax credits for free. There are also tax services authorized by the IRS to allow you to file your taxes online or in person for free.
California’s Earned Income Tax Credit (CalEITC)
You may qualify for the California EITC if you’re at least 18- years-old or have a qualifying child and earned income of $30,000 or less.
A qualifying child is defined as either the child or stepchild of the person claiming the deduction which can be by blood or adoption or the foster child, sibling or step sibling or any of the above. They must also have the same residence as the taxpayer for more than half the year and they must be younger than the taxpayer, 19-years-old or younger at the end of the year, or a full time student for at least five months of the tax year under the age of 24. Permanently and totally disabled children may be included at any age.
The tax credit can be claimed by only one taxpayer however, there are stipulations as to who can claim the child.
Black Voice News spoke with Aonya McCruiston of Golden State Opportunity to ask some questions regarding the California EITC: Golden State Opportunity is a nonprofit dedicated to ending poverty by providing all Californians with the tools to build financial well-being and thrive. The organization was founded by investor and activist Joe Sanberg. The organization’s main program, CalEITC4ME, facilitates outreach to low-to-moderate-income residents to enroll them in the CalEITC program
In an exclusive interview with Black Voice News, McCruiston shared additional information regarding CalEITC.
Regarding the possibility of those who are unemployed filing for the tax credit McCruiston stressed, “The only way for anyone to claim cash back tax credits like the California Earned Income Tax Credit (CalEITC) is to file a tax return. When you file your taxes, you need to report the income you earned in 2021, including unemployment insurance, and that will determine which credits you are eligible for.
She further clarified that working people over 65 can also file for CalEITC, as long as they earned between $1 and $30,000 last year. The amount you receive depends on your annual income and your household size.
Also according to McCruiston, “Free, IRS-certified tax preparation is available both online and in your community if you earned less than $57,000 last year.” Follow this link to learn more. BVN:
For additional information regarding the CalEITC visit.caleitc4me.org.