2009 Fact Sheet on Work Incentives Work Incentives Network (WIN) A foundation for a sustainable statewide work incentives planning and outreach infrastructure Do you know that as a working individual you might be eligible for an Earned Income Tax Credit of up to $4,700, depending on your family size? In addition, you may qualify for free help preparing your income tax return through the Volunteer Income Tax Assistance Program. What is the Earned Income Tax Credit? If you’re like millions of Americans, you work hard but you don’t earn a high income. The Earned Income Tax Credit is a tax credit designed to put money back in the pockets of working people with low-to-moderate incomes. This tax credit can reduce your taxes and help you keep more of what you earn. Filing for the Earned Income Tax Credit means that you could receive a refund payment from the Internal Revenue Service. To get the Earned Income Tax Credit, you must meet certain requirements and file a tax return, even if your income from working is low enough that you are not required to file a return. Filing for and receiving a refund payment from the Earned Income Tax Credit has no effect on many other public benefits you may get. In most cases, the Earned Income Tax Credit payment will not be counted against your eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing, Medicaid Insurance for Workers with Disabilities (MIWD) or Temporary Assistance for Needy Families (TANF). Because the income is a federal return it will not impact any federal programs you participate in. How do I claim the Earned Income Tax Credit? You can claim the Earned Income Tax Credit when you file your annual tax return. You can also choose to receive part of your refund payment sooner by participating in the Advance Earned Income Tax Credit program. To enroll in the Advance Earned Income WIN activities are supported by a Medicaid Infrastructure Grant awarded to the Nebraska Department of Health and Human Services from the Centers for Medicare and Medicaid Services (11-P-92404-7/04). Tax Credit program, you will need to complete a W-5 form, which you can get from your employer, or, from this website: http://www.irs.gov/pub/irs-pdf/fw5.pdf. If you participate in the Advance Earned Income Tax Credit program, you still need to file an annual tax return and claim the Earned Income Tax Credit. What if I need help filing a tax return? You may qualify for FREE help to file a tax return and claim the Earned Income Tax Credit through the Volunteer Income Tax Assistance Program. This program offers help to people with low-to-moderate income (generally those earning about $40,000/year or less) who cannot prepare their own tax returns. Certified volunteers receive training to help prepare basic tax returns and are then available to help at community and neighborhood centers, libraries, schools, shopping malls, and other convenient places. To find the Volunteer Income Tax Assistance program site nearest you, call 1-800-829- 1040. How can I get my tax refund quickly? Filing your taxes electronically is the best way to get your refund quickly. Many Volunteer Income Tax Assistance program sites offer free electronic filing. Also, having the IRS deposit your refund directly into your bank account can also help you get your refund faster. You can also use the IRS Free File website to file your taxes. Free File is a free federal income tax preparation and electronic filing program for eligible taxpayers. You may access free commercial online tax preparation and electronic filing services through the IRS.gov website. Eligible taxpayers may prepare and file their federal income tax returns using commercial online software provided by the Free File Alliance companies. Free File is only available to taxpayers who have less than roughly $54,000 of gross income in 2008. Individual company offers may be limited to specific states and include other criteria. Carefully review the Free File offer criteria before selecting the company. Each participating software company sets its own eligibility requirements. You can find a Free File service that best meets your needs at http://www.irs.gov/efile/article/0,,id=118986,00.html. Beware of refund anticipation loans, sometimes called ‘Fast Cash’ or ‘Quick Refund’. These services may get you a quick refund, but they have very high interest rates and can end up costing you hundreds of dollars and are often considered predatory lending. Having your own checking account in a financial institution will allow you to cash checks free as well as having the option to take a loan if needed. Avoiding Fast Cash/Quick Refund services will go a long way in saving you money. This is also true regarding your day to day financial needs. Using your credit union or bank for a loan or for cashing checks instead of Fast Cash/Quick Refund services will save you a large amount of money over time WIN activities are supported by a Medicaid Infrastructure Grant awarded to the Nebraska Department of Health and Human Services from the Centers for Medicare and Medicaid Services (11-P-92404-7/04).