Get Advance On Earned Income Credit
Taxpayers frustrated by the Internal Revenue Service’s new scrutiny on returns claiming the Earned Income Credit have another way to get their money.
Instead of waiting until the end of the tax year to get the up to $2,500 credit from the government, you can get more than half that money each week in your paycheck.
Using a little-known program, taxpayers can apply for the Advanced Earned Income Credit. Up to 60 percent of the credit a family qualifies can be sent to them through their paycheck, said Judy Monahan, IRS spokeswoman for the Seattle District office.
“I don’t know why, but no one really ever hears about this program,” she said. “It makes a lot of sense for families who don’t want to have the hassle of getting the credit at the end of the year.”
Putting the extra money in a paycheck doesn’t cost the employer anything, Monahan said. And instead of getting a lump sum in the spring, a family can budget more efficiently by having a portion of the credit in each paycheck.
The Earned Income Credit helps working families with low and moderate incomes stay afloat, said Merry Trudeau, an IRS spokeswoman for the Boise District office in Idaho. President Clinton expanded provisions in the credit to help more people this year.
But the IRS has cracked down on fraudulent returns claiming the credit. In the past people have claimed non-existent children for the credit to the tune of $5 billion of taxpayer dollars, Trudeau said.
Families qualify for the credit if they make between $9,000 and about $23,000 and have one or more children. Childless families can get a much smaller credit under the rules, but the families with more children can receive up to $2,500.
In Washington state, about 217,000 taxpayers asked for the Earned Income Credit out of 1.9 million individual returns, Monahan said.
In Idaho, 59,616 taxpayers out of 516,277 asked for the credit last year, Trudeau said.
The IRS now has a new program to check the Social Security numbers of everyone listed on returns. That has delayed refund checks - especially for those qualifying for the Earned Income Credit - for up to two months and sometimes even longer.
Taxpayers who qualify the advanced credit program can fill out a W-5 form at their work or call 1-800-829-1040 to get information on the program. Local offices that carry tax forms may also have information on the advanced credit program.
xxxx Earned Income Credit The Earned Income Credit assists low- to moderate-income families, most of whom work and have children. In 1993, the government extended the credit to families without children. QUALIFICATIONS: Cannot use “Married Filing Separately” filing status. Person filing cannot be the qualifying child of someone else claiming the credit. If taxpayer has no children, must be between 25-65 years old and cannot be claimed as a dependent by another taxpayer. INCOME LIMITS: $25,296 if they have more than one child. $23,755 if they have one child. $9,000 if they have no children. MAXIMUM AMOUNT OF CREDIT: If no children and income level $4,000-$ $306. If one child and income level $7,750-$ $2,038. If more than one child and income level $8,400-$ $2,528.