Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 24, 1992 TAG: 9201240017
SECTION: NATIONAL/INTERNATIONAL PAGE: A3 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
MILLIONS FAIL TO CLAIM TAX CREDIT
At least 2 million low-income working families with children are failing to claim a special tax credit worth up to $2,020 a year, the Internal Revenue Service estimated Thursday."This is a law that really does do good things for working families," IRS Commissioner Fred Goldberg said in joining a nationwide public-service campaign to publicize the earned-income credit. But the credit can't help if it isn't claimed, he noted.
Many of those who miss out on the credit earn so little that no tax is withheld from their paychecks, so they don't even file a return, Goldberg said.
"Two Simple Steps" is the theme of this year's campaign, reminding eligible families that they must file a return and attach a new Schedule EIC. The IRS will even calculate the credit.
"At a time when the economy is weak and there isn't much good news for hard-pressed working families, the earned-income credit is a notable exception," said Robert Greenstein, director of the Center on Budget and Policy Priorities, which is coordinating the information campaign.
Many workers who lost their jobs or worked only part time last year because of the recession may be eligible for the credit for the first time, Greenstein said. At least some of the credit may be available to a family until earnings exceed $21,250.
More than 12 million families took advantage of the credit on returns filed last year, when more than 14 million were eligible. The IRS estimates that because of the recession and expansion of the credit by Congress, the total number eligible may hit 16 million this year.
The earned-income credit was enacted to offset a portion of Social Security taxes and to give low-income parents with children an extra incentive for working and staying off the welfare rolls. It has been expanded regularly, most recently in 1990.
Most working families with earnings between $6,000 and $13,000 qualify for a credit of at least $1,000. The maximum basic credit is $1,192 for a one-child family and $1,235 for a family with two or more children. A new supplement provides up to an additional of up to $357 for a child who was born in 1991 and another $428 maximum to help buy health insurance.
IRS Publication 596, which explains the credit, is available by calling 1-800-829-3676.