More Taxpayers Eligible for Earned Income Tax Credit

Peggy R. Anderson

Extension Agent

January 26, 2011

More Taxpayers Eligible for Earned Income Tax Credit

Job layoffs and pay cuts in 2010 mean many taxpayers will be eligible for the earned income tax credit (EITC) for the first time this year, says North Dakota State University Extension Service family economics specialist Debra Pankow.

For the 2009 tax year, 44,136 North Dakotans received earned income tax credits totaling $85 million. The average amount per taxpayer was $1,926. Nationwide, more than 25 million people received a total of nearly $58 billion.

The EITC is a tax credit for those who work part or full time and earn low wages.

“The 2009 American Recovery and Reinvestment Act expanded and changed the EITC, making it accessible to even more taxpayers,” Pankow says. “A tax credit can lower the amount of taxes a taxpayer owes, or it could give them a refund.”

To claim an EITC on your tax return:

• You must have a valid Social Security number
• You must have earned income from an employer or self-employment
• You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and you and your spouse are filing a joint return
• You are not a qualifying child of another person
• You can’t file Form 2555 or 2555-EZ, which are related to foreign earned income

Legislation passed in December 2010 also will encourage more taxpayers to take advantage of the EITC, Pankow says.

The legislation simplified and standardized the rules for how the earned income and child tax credits and any tax refunds are treated in determining eligibility for public benefit programs.

The legislation excludes any federal income tax refund from counting as income in determining eligibility or the amount of the benefit for any federally funded public benefit program. The legislation also provides that any money the taxpayer saves does not count against the taxpayer’s resource limits for any federally funded public benefit program for 12 months after the refund is received. These new rules are in effect for 2010 through 2012.

“This should encourage lower-income workers to participate in savings programs without worrying about exceeding resource limits and jeopardizing their eligibility for public benefits,” Pankow says.

For more information on the EITC, visit http://www.irs.gov/individuals/article/0,,id=130102,00.html

Stay Hydrated During Winter Months

It is hard to imagine going into heat exhaustion when you can see your frozen breath as you exhale during a long winter workday. However, this thought can become a reality if proper steps are not taken to stay hydrated.

“It only takes a five percent loss in body water to go into heat exhaustion and that can happen really easily if we’re out perspiring a lot, working in the winter months when we’re bundled up and perspiring more than we may realize,” said Janice Hermann, Oklahoma State University Cooperative Extension adult nutrition specialist.

Six cups to eight cups of fluid intake per day is recommended, but an additional two cups to three cups are required for more active days. People tend to remember and want to drink more when it is hot outside when perspiration is more physically obvious.

“People become dehydrated when their fluid intake is less than their output,” Hermann said. “People may not drink as much during the winter months, so their intake tends to go down.”

Signs of heat exhaustion include headaches, dizziness, confusion and impaired physical performance. Urine should be a light straw color, said Hermann, who suggested weighing yourself before and after a day of hard work to monitor against heat exhaustion.

“It takes about two cups of fluid for every pound you may lose in perspiration,” Hermann said. “Drinking plain cool water is the best because it’s absorbed the most rapidly.”

Age can also make a difference

“As we get older, we tend to be more at risk for dehydration,” said Hermann. “As we age, our percent body water decreases so we have a lower margin of safety.”

Also, certain medications may increase water loss. While cool water is the best way to restore fluids, sports drinks with electrolytes, juices, milk and even caffeinated beverages can get the job done.

Schedule

Wednesday, January 26 – Burke County

Thursday, January 27 – Personal Leave Day

Friday, January 28 – Personal Leave Day

Monday, January 31 – Burke County

Tuesday, February 1 – Divide County