The IRS is urging victims of last year’s hurricanes, especially those who lived in areas affected by Hurricanes Harvey, Irma and Maria, to see if they qualify for the Earned Income Tax Credit (EITC). According to the IRS, many people whose incomes dropped in 2017 may be eligible to choose a special option for figuring EITC, a credit for low-and moderate-income workers and families.
A special computation method, available only to people who lived in one of the hurricane disaster areas during 2017, may enable them to claim EITC or claim larger than usual credit. Under this method, taxpayers whose incomes dropped in 2017 can choose to figure the credit using their 2016 earned income rather than their 2017 earned income. Eligible taxpayers should figure the credit both ways – the regular way using 2017 earned income and this special way using 2016 earned income – to see which yield the larger EITC.
The EITC helps working people who don’t earn a lot ($53,930 or less for 2017) and meet other eligibility requirements. Because it’s a refundable credit, those who qualify and claim it could pay less federal tax, pay no tax or even get a refund.
EITC can mean up to a $6,318 refund for working class families with qualifying children. Actual credit amounts vary based on income, family size and other factors. Workers without a qualifying child with incomes below $20,600 could also be eligible for a smaller credit of up to $510. On average, EITC adds $2,445 to refunds.
To get the credit, people must file a tax return, even if they owe no tax and even if they normally aren’t required to file. Let Bourke Accounting help prepare your tax returns. We are open year round and are ready to help. Give us a call at 502-451-8773 or come by for a visit. See you soon!