Facing the most serious economic downturn in decades, an increasing number of working individuals and families may be eligible for the earned income tax credit (EITC), according to Debra Pankow, North Dakota State University Extension Service family economics specialist.

If you worked full time or part time during 2008 and had a low to moderate income, you may qualify.

If you qualify, you owe less in taxes and may get cash back. Also, some people who don’t owe taxes can get the EITC. However, to get these credits, you must file a tax return.

The amounts that someone will receive vary with income and circumstances. Here are some figures for the maximum amount that workers can receive for the earned income tax credit:

• If you lived with one child in your home in 2008 and your family earned less than $33,995 ($36,995 for married workers), you can get up to $2,917.
• If you lived with two or more children in 2006 and your family earned less than $38,646 ($41,646 for married workers), you can get up to $4,824.
• If you had no children living with you, earned less than $12,880 ($15,880 for married workers) and are between the ages of 25 and 64, you can get up to $438.

Investment income must be $2,950 or less for the year.

“In North Dakota, 39,877 households received more than $67 million in 2007,” Pankow says. “Across the country, 23.1 million eligible families and individuals claimed the tax credit worth $44.6 billion. “However, despite the impressive numbers, millions more eligible families did not file for the credits.”

In addition to the EITC, you may qualify for the child tax credit (CTC). To claim the CTC, you must have at least one qualifying child and have income under a certain limit, depending upon your tax filing status. The CTC is partially refundable for some families.

For the 2008 tax year, to have the CTC refunded, you must have taxable earned income above $8,500 and have your CTC be worth more than the tax you owe.

The child must live with the worker in the U.S. and be under age 17. Parents of full-time college students under the age of 24 or students of any age who have total and permanent disabilities also may be able to claim the CTC. The child must be a U.S. citizen or resident alien and must have either a valid Social Security number or an individual taxpayer identification number.

Qualifying children can include:

• Sons, daughters, stepchildren, grandchildren and adopted children
• Brothers, sisters, stepbrothers or stepsisters – provided that you cared for the individual as you would your own child
• Foster children who are placed with the worker by an authorized government or private placement agency.

Free tax filing help is available by calling the Internal Revenue Service at (800) 828-1040.

NDSU Agriculture Communication