The Earned Income Tax Credit -EITC – is perhaps the best safety net program I’ve ever known. Actually, it is part of the tax code. Nonetheless, I have written about it in nine of the past twelve years in this blog. This year I’ll try to keep it simple.
Millions of taxpayers don’t get an EITC credit for a number of reasons. They don’t know about it, they are perhaps paying income tax for the first time, or because tax preparation is way too complicated or expensive.
There is free tax software, if you read the fine print. Remember, the devil is in the details. Here are a couple tax assistance programs and how to access them. The first is Free File, a partnership between tax software companies and the IRS. This is the fine print you will read on the Free File website:
IRS Free File lets you prepare and file your federal income tax online for free. File at an IRS partner site with the IRS Free File Program or use Free File Fillable Forms. It’s safe, easy and no cost to you for a federal return.
To receive a free federal tax return, you must select an IRS Free File provider from the Browse All Offers page or your Online Lookup Tool results. Once you click your desired IRS Free File provider, you will leave the IRS.gov website and land on the IRS Free File provider’s website. Then, you must create an account at the IRS Free File provider’s website accessed via Irs.gov to prepare and file your return. Please note that an account created at the same provider’s commercial tax preparation website does NOT work with IRS Free File: you MUST access the provider’s Free File site as instructed above.
The other is MyFreeTaxes. United Way provides MyFreeTaxes in partnership with the IRS’s Volunteer Income Tax Assistance (VITA) program.
Local, county, and state government need to do more to spread the word. A number of organizations provide outreach tool kits to enable effective outreach campaigns. Let’s reach those who need the help the most. Participate on EITC Awareness Day, the last Friday in January.
There is a conspiracy that prevents tax filing from being easy. K Street lobbyist prevent IRS from sending out partially-prepared tax forms to each taxpayer. Do a web search: “lobbyist oppose free IRS tax software”. Write your Members of Congress to ask why.
My Earned Income Tax Credit page has been updated for the 2021 tax season to include up-to-date EITC income-eligibility guidelines plus links to programs mentioned above.