Wednesday, March 23, 2016 - 12:26pm
Mayor Paul Soglin today reminded Madison residents who qualify for the Earned Income Tax Credit (EITC) to take the steps necessary to claim their benefits. The Credit can provide significant cash payments to eligible residents, however, each year millions of dollars are forfeited because residents fail to submit their claims.
The Earned Income Tax Credit is a federal benefit designed to boost the incomes of lower-wage workers. It provides a payment to qualified single workers who earn as much as $47,747, or married couples earning up to $53,267. The amount of the credit, which can reach as high as $6,242 for a household with three or more children, depends on the amount of income that is earned and the number of children in the household. (See the table below for a summary of benefits.)
"This Credit can provide real help for working families in meeting the demands for rent payments, heating bills, car repairs, child care, or saving for future needs," said Mayor Soglin. "Unfortunately, many eligible workers lose out on hundreds or even thousands of dollars of cash payments because they do not file a claim."
The IRS estimates that nearly one in five eligible workers miss out on the EITC benefit because they do not know about it, do not realize that they are eligible to receive it, or do not know how to claim it. The Mayor’s goal is to make sure that does not happen to eligible families in Madison.
"The first thing people need to understand is that they need to file a federal tax return in order to get the EITC credit" said the Mayor. "That is true even if a person isn’t required to file a return because they don’t make enough money or owe any taxes. This fact probably causes the most confusion about the EITC. If you don’t file a federal income tax return and claim the Credit, you won’t get the benefit," he said. "It’s as simple as that."
Individuals and families in Madison that have questions about the EITC, or need help claiming it, are encouraged to take advantage of free assistance that is available. Situations can change from one year to the next in ways that affect eligibility for the EITC. For example, a family might gain eligibility for the first time because somebody begins working, changes their marital status, or has a child. A trained volunteer can determine very quickly if a person or family qualifies for the credit.
"The City has a strong group of skilled volunteers who can help people understand if they are eligible for the benefit and take the steps necessary to claim it," he said. "There is no cost for this service."
Free tax assistance is available at the Richard Dilley Tax Center located in the Villager Mall, at 2300 South Park Street. This volunteer site, provided through a partnership between the Dane County UW-Extension Financial Education Center and AARP, is open every Monday, Wednesday, and Saturday through April 16, without appointment. Help is also available from trained volunteers at Volunteer Income Tax Assistance (VITA) sites throughout Madison, including the Senior Center, the Central Library, and several library branches. A complete list of all locations offering free tax preparation is included on the attached brochure. The information can also be accessed by contacting 2-1-1 or the Dane County UW-Extension Financial Education Center at (608) 261-5077, or by using their Website: http://dane.uwex.edu/family-living/financial-education-center/
Mayor Soglin also called on employers in the Madison area to help get the word out about the EITC to their employees, customers and clients. "Please make every effort to help hard working families receive the benefits to which they are entitled," he said.
The EITC credit varies depending on the amount of earned income and the number of dependent children in the taxpayer’s household. The maximum credit for 2015 is:
- $6,242 for a household with three or more children and earned income up to $47,747 ($53,267 for a married couple, filing jointly)
- $5,548 for a household with two children and income up to $44,454 (49,974 for a married couple, filing jointly)
- $3,359 for a household with one child and income up to $39,131 ($44,651 for a married couple, filing jointly)
- $503 for a household with no children and income up to $14,820 ($20,330 for a married couple, filing jointly)
The State of Wisconsin provides an additional credit to families with children that qualify for the federal EITC. The State credit adds up to $2,122 for a household with three or more children, up to $610 with two children and up to $134 for a household with one child. Households with no qualifying children are not eligible for a State credit.
- Linette Rhodes, Community Development Division608-261-9240