Tax Information

CKEEP tax sites will prepare and file your taxes for free electronically ensuring a greater accuracy and faster returns. VITA sites offer tax preparation free of charge to indiviuduals or families earning less than $42,000. Our IRS-certified counselors will help you access tax benefits, such as the EITC and the Child Tax Credit. Plus you'll keep 100% of your refund.

What is the Earned Income Tax Credit (EITC)?
A federal income tax credit for people who work, but don’t earn much money. If you qualify, it could be worth up to $4,824 this year. So you could pay less federal tax or even get a refund. But it’s not just about the money, its about the difference it can make in your life.

What is Earned Income?
It is income you get from employment or self-employment. Here are some examples:

• Taxable wages, salaries & tips
• Net earnings from self-employment
• Gross income received as a statutory employee

Earned income does not include:

• Nontaxable employee benefits such as education assistance
• Pensions
• Alimony
• Child Support
• Temporary Assistance for Needy Families (TANF)

Am I eligible for the EITC for 2008?

• You must have earned income from employment or self-employment.
• Your earned income & adjusted gross income must be less than:
  $12,880 with no qualifying child ($15,880 if married filing jointly)
  $33,995 with one qualifying child ($36,995 if married filing jointly)
  $38,646 with more than one qualifying child ($41,646 if married filing jointly)
• Your investment income (such as interest) must be $2,950 or less.
• Your filing status cannot be married filing separately.
• You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
• You must have a valid Social Security number.
• You cannot be a qualifying child of another person.

If you do not have a qualifying child, you must:

• Be between 25-65 years old at the end of the year,
• Live in the United States for more than ½ the year,
• Not qualify as a dependent of another person.

What is the Child Tax Credit?
It’s a federal tax credit intended to reduce your tax based on the number of children you have in your household. The credit is up to $1,000 per qualified child under the age of 17.

Who is a Qualifying Child?
A child who meets the relationship, age & residency tests. A qualifying child is:

• Is your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a dependent of any of them.

At the end of the year was:

• Under age 19, or
• Under age 24 and is a full-time student, or
• Any age if permanently & totally disabled at any time during the year.
• Lived with you in the United States for more than half the year.
• An adopted child, including a child placed with you for adoption, is treated as your biological child.
• A foster child is any child placed with you by an authorized placement agency or a court.

What if I have the same qualifying child as someone else?
If two or more persons have the same qualifying child for the EITC, dependency exemption, child tax credit, head of household filing status, or credit for child and dependent care expenses, only one person can claim the child as a qualifying child for all those benefits (for example if you don’t live together, are divorced, or the child lives with some other relative, only one of you can claim the child for tax purposes).

You must decide who will claim the benefits, including the EITC, using that qualifying child. If you cannot agree, and more than one person actually used the same child on their taxes, the IRS will determine who gets the credits.

How Can I Get Help Claiming My Credits?
In Lexington, low-income families can get their taxes filed for free at Volunteer Income Tax Assistance (VITA) sites.  Call 2-1-1 to learn more or to make an appointment at one of our various tax sites.

Click here for the IRS website to learn more about eligibility for EITC, the Child Tax Credit and other related information.

Starting in May, the Treasury will begin sending economic stimulus payments to more than 130 million households. To receive a payment, taxpayers must have a valid Social Security number, $3,000 of income and file a 2007 federal tax return. IRS will take care of the rest. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. Millions of retirees, disabled veterans and low-wage workers who usually are exempt from filing a tax return must do so this year in order to receive a stimulus payment. For more information, visit www.irs.gov.