Education for Justice FACT
SHEET T-1 for tax year 2007
TAX REFUNDS FOR PEOPLE WITH LOW
INCOMES
Knowing your tax rights can mean money – sometimes a lot of
money – to help your family. It is worth
your time to check it out. You may be able to get your taxes done for
free. To find help near you, call
(651) 297-3724 or
People who work and earn above certain amounts must file both state and federal income tax returns. Even if you earn below these amounts, you can file to get a refund. Tax forms should be filed by April 15th of each year. You file this year using the income information from the past year. So, in 2008 you file a tax return for 2007. If you owe money, you have to pay penalties and interest on any amount not paid by April 15th.
FEDERAL CREDITS
§ EARNED INCOME
TAX CREDIT (EITC)
The EITC is a tax credit for people who work. The maximum credit is $4,716. Single and married people can get it. You don’t have to have children, but the credit is higher if you do. There are rules about which children you can claim. See below. If you ignore the EITC rules, you may be denied the EITC for up to 10 years.
You
must have worked during 2007. You can’t
get EITC if you earned money outside the
· $37,783 if you have 2 or more qualifying
children
(or $39,783 if married filing a joint return)
· $33,241 if you have one qualifying child
(or $35,241 if married filing a joint return)
· $12,590 if you have no qualifying children
(or $14,590 if married filing a joint return)
Do I Meet the EITC Rules?
· You must be a
· You need a valid social security number for
you, your spouse, and children you claim.
· Your filing status can’t be “married filing
separate.”
· Your investment income must be less than $2,900.
· You can’t claim the EITC if someone else
claims you as a “qualifying child.”
Can I Claim a Child for EITC?
You can claim a child for EITC if:
· S/he is your child by birth or adoption,
your grandchild, stepchild, brother, sister, stepbrother or stepsister. You can also claim the child of any of these
relatives. You must have cared for the
child as your own. You can claim an
eligible foster child.
· The child must have lived with you in the
· The child must be:
- under age 19 on December 31, 2007;
- a full-time student under age 24 on December 31, 2007; or
- permanently and totally disabled at any time during 2007, age doesn’t matter.
If a child is a qualifying child for more than one taxpayer and they both claim the child, the parent who lived with the child longest that year will be given the credit. If the child lived with both parents for the same length of time, the parent with the higher income gets to claim the credit.
If the child:
· did not live with a parent,
· is a qualifying child of more than one taxpayer, and
· they can’t agree who should claim the child, then the taxpayer with the highest income gets to claim the credit.
Who Is an Eligible Foster Child?
An eligible foster child is a child placed with you by an authorized placement agency, and who lived with you at least 6 months during 2007. S/he must meet the age rules above.
Can I Claim the EITC If I Don’t Have a Child?
Yes, if you:
· are between 25 and 64 years old;
· aren’t the dependent of another;
· aren’t the qualifying child of another; and
· lived in the
How Do I Get the EITC?
· File a federal tax return (1040EZ,
1040, 1040A).
· If you have a qualifying child, file 1040 or
1040A AND Schedule EIC.
The IRS Will Figure The EITC For You. If you qualify for the EITC, you can ask the IRS to figure the amount for you. If you have a qualifying child, you must still fill out the first half of Schedule EIC. You can get part of the EITC in advance as part of your paychecks. See our fact sheet Advance EITC.
Will the EITC Affect my MFIP, SSI, Food Stamps or Other
Benefits?
Generally, EITC payments don’t count as income during the month you get the check or the next month. After 2 months, any refund left counts toward your asset limit for figuring public assistance. EITC can count as an asset right away if you get food stamps. Keep all of your receipts; you may need to prove how you spent the money.
EITC Pre-Certification
You may
have to fill out forms to show you are eligible for EITC before or at the same
time you fill out your tax returns. If
the IRS sends you a letter stating you must do this, contact Legal Aid.
§ FEDERAL CHILD
TAX CREDIT
You can get a tax credit up to $1000 for each child under age 17 that you claim as a dependent. Fill out the Child Tax Credit worksheet in the instruction booklet and Form 8812. You can use an ITIN instead of a Social Security number for this credit. You can claim this credit and the EITC.
§ FEDERAL CHILD
AND DEPENDENT CARE CREDIT
If you have daycare costs for working or looking for work, you can get a tax credit. You can use costs you paid for a dependent child under age 13 or a disabled dependent of any age. To get this credit, you must have the taxpayer ID number of the person or program providing care. File Form 2441 or Schedule 2.
§ FEDERAL
EDUCATION CREDITS
If
you paid tuition and fees at a university or college for yourself, your spouse,
or a dependent, you can get up to $2,200 in education credits. File Form 8863.
§
If
you meet the EITC rules and your income was earned in
§
You can get a state tax credit for the cost of care for a dependent while you worked or looked for work. The dependent can be a child under age 13 or a disabled dependent of any age. To get this credit, fill out Form M-1CD.
§
You can get a state tax credit or subtraction for costs for your children’s schooling or related things. These cover children in kindergarten through high school. The maximum credit is $1,000 per child. You can use costs like: tutors, academic books and materials, fees paid to others for transportation, music lessons, after school programs, and academic summer camps. You can also use costs for computer hardware or educational software ($200 limit). Private school tuition is a subtraction only. To get the credit, fill out Form M-1ED. To use the subtraction, do the worksheet on the back of Form M-1.
§
This
refund is based on your income and the amount of property taxes you pay as a
homeowner or renter. Renters get a
Certificate of Rent Paid (CRP) from their landlord. If your landlord won’t give you one, see our
fact sheet Renter’s Refund. Homeowner refunds are based on the next
year’s statement of property taxes. The house
or apartment must be your main place of residence or homestead. To claim this refund, fill out form
M-1PR. This form should be filed by
August 15. You can claim this refund up
to one year late.
IF YOU HAVE
NOT FILED, FILE NOW!
The
EITC and other income tax credits can be claimed up to 3 years late. If you did not file a tax return for some or
all of the last 3 years, you can file now and claim the EITC and other
credits. The forms and credit amounts
change each year. Be sure to use the
form for the year that you are filing for!
For forms call the IRS at the number below or get them off their
website, www.irs.gov. If you did file your return, but did not
claim credits you now think you could have used, you can file an amended Form
1040X (federal) or M-1X (
If you met all the rules for getting the EITC in the years before now, except that you did not have a social security number, but now you do, you can use your new social security number to file your tax returns and claim the EITC for the past 3 years.
For federal tax questions, call 1-(800) TAX-1040.
For
Low
income and disabled persons, and senior citizens can get their tax forms done
for Free. To find help near you, call (651) 297-3724 or
This
fact sheet applies only to tax year 2007.
Income tax returns must be filed
by April 15th, 2008.
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