IRS Kicks Off Tax Season With ‘EITC Awareness Day’

The Internal Revenue Service declared January 31, 2014 as a day of awareness regarding the Earned Income Tax Credit. The credit has now existed for nearly 40 years, but still often goes unclaimed by many taxpayers who are eligible to receive it. The IRS’s awareness push is designed to use the power of social and traditional media to raise the credit’s visibility and reduce the number of eligible taxpayers who will fail to claim the credit.

The EITC dates back to 1975, when Congress established the credit to counteract some of the effect of Social Security taxes and, in so doing, create a greater financial incentive to choose work over welfare. Congress made the credit permanent in 1978 and greatly expanded its reach under President Reagan in the 1980s.

The IRS’s goal for EITC awareness is “to reach the broadest possible range of potentially-eligible taxpayers” possible, in order to ensure that the maximum number of eligible taxpayers will claim the credit on their income tax returns. The IRS’s awareness push particularly seeks to capture the attention of newly eligible taxpayers and groups who have historically posted particularly high incidences of failing to claim the credit, despite being eligible. David Tucker II, a spokesman for the IRS, told the Seattle Post Intelligencer that, according to the agency’s estimates, roughly 20% of eligible taxpayers fail to claim the credit. With efforts like EITC Awareness Day, “[w]e hope to change that,” the spokesman stated.

In addition to using social media, the agency scheduled several EITC Awareness-related events. These included news conferences and other events hosted by the IRS’s commissioner, local officials and community organizers.

Eligibility for the EITC varies based upon several facts. If a taxpayer has a larger family, he or she might still be eligible for the credit, even with a somewhat higher income. For 2013 tax returns, which are due by this April 15, the income cap for EITC ranges from a low of $14,340 for a single taxpayer with no qualifying children to a high of $51,567 for a taxpayer who has three or more qualifying children and uses married filing jointly status. Taxpayers who use married filing separately status are ineligible for the EITC.

For the EITC, the IRS defines a qualifying child as a child, adopted child, step-child, foster child, sibling, step-sibling, half-sibling, or the descendant of any of those people, as long as the child was younger than you and age 19 or younger at the end of 2013. A qualifying child may be as old as 24 if he or she is a full-time student.

Each year, taxpayers throw away countless sums of money by failing to claim all the tax deductions and credits for which they qualify. To ensure that you receive the full refund allowed by the law (or owe the smallest amount possible,) consult the experienced tax attorneys at Samuel C. Berger, P.C. and CPAs at S.C. Berger, P.C. Their in-depth knowledge and awareness of the tax code and regulations can help you get the best possible result from your income tax return. To consult our attorneys and CPAs, contact us online or call (201) 587-1500 or (212) 380-8117.

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