Tuesday, January 1, 2013

Happy New Year! Earned Income Tax Credits, and How the Poor May Have Not Been Entirely Screwed by Washington. We'll See

Happy New Year's, peeps!  Among the hooha about raising taxes on the top 2% in the fiscal cliff negotiations, it was little noted that the expansion of earned income tax credits instituted in 2009 were scheduled to expire.  It appears that the deal struck by the Senate late last night will preserve this expansion.  **Update** The final law passed, extending the current EITC expansion for five years.

As noted in this blog before, the earned income tax credit is a tax break available to the working poor, giving them not only a deduction, but an actual credit on earned income.  It was established in the 1980s, and expanded at various times, the latest being in 2009.  In the new fiscal cliff agreement, it (hopefully) will be preserved--if the House agrees to the package.  We'll see.

However, 24 states also have an EITC for poor and moderate income wage earners.  Click here to find out if your state has an EITC.  To find the tax office for your state and its current tax forms, check here, courtesy of the Federation of Tax Administrators.  If you are a low to moderate income person, you may also find someone to prepare your taxes for free as well, or call 1-800-906 9887 (for VITA tax services) or 1-888-227-7669 or tax services for the elderly.

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