With tax season in full swing, taxpayers could be overlooking one very important credit that could mean extra cash from the IRS.
Tax experts say nearly half of the people who qualify for the Earned Income Tax Credit never apply for it.
The federal tax credit is for parents with one or more children who make up to $49,000 per year. The extra refund – issued on top of one’s regular tax return – could result in a hefty check for up to $5,700, depending on one’s filing status and the number of dependents they have.
“We had cases where the people had not expected it and when they saw their refund [after applying for the Earned Income Tax Credit], they burst into tears,” said Frank Edmonds of H&R Block.
Again, the money that comes from applying for the Earned Income Tax Credit is issued in addition to whatever one’s regular tax refund might be.
There is also a provision for military men and women who are in combat; they have a choice on declaring their combat pay.
“If it helps you to add the combat pay to get more income tax credit then you may do so. If it doesn’t, then you don’t have to use it,” said Edmonds.
To get the tax credit, taxpayers must fill out an additional form when filing their taxes.
And, whether the extra cash is $100 or $5,000, it can be a big deal for the people who qualify.