Released: March 17, 2004

Tax Benefit Overlooked – Millions Unclaimed

MANHATTAN, Kan. – Imagine, if you can, what it would be like to get a check in the mail that could help you pay bills or set aside money for emergencies.

Now, consider this: The Earned Income Tax Credit (EITC) can reduce income taxes owed and may also result in a refund. It’s designed to help low- to moderate-income individuals and families, yet as many as 15 percent of the Kansas taxpayers eligible for the tax credit this year will fail to apply, said Cindy Evans, Kansas State University Research and Extension family and consumer science agent in Shawnee County.

“In Kansas, the unclaimed federal funds are expected to exceed $20 million this year. And, because the state is one that matches EITC funds, more than $3 million in matching funds also will be unclaimed,” she said.

The EITC tax credit is an outgrowth of welfare-to-work programs. It can be retroactive for up to three years, and low-to-moderate income families who receive the tax credits typically use the money to pay bills, according to Judy Stengel, senior tax specialist with the Internal Revenue Service (IRS), based in Wichita, Kan.

To qualify, Stengel said, earned income must be less than:

* $11,230 for an individual with no qualifying children, or $12,230 if married and filing jointly;

* $29,666 for an individual with one qualifying child or $30,666 if married and filing jointly with one qualifying child;

* $33,692 for an individual with more than one qualifying child or $34,692 if married and filing jointly with more than one qualifying child.

A qualifying child is a son, daughter, adopted child, grandchild, great-grandchild, stepchild, or eligible foster child who, at the end of the tax year is under age 19 or under age 24 and a full-time student, or permanently and totally disabled at any age during the year. The child must live in the United States with the taxpayer for more than half of the tax year.

Applicants for the tax credit must have a valid Social Security Number (SSN) for themselves, their spouse (if filing jointly) and any qualifying child listed on Schedule EIC. Investment income cannot be more than $2,600.

To learn more about the EITC or other time- and money-saving strategies, contact the county K-State Research and Extension office. For IRS information and publications, call 1-800-829-3676 and ask for the “Guide to Free Tax Services” (publication #910), or the “Earned Income Credit” (publication 596) or visit the Web Site at www.irs.gov/individuals/index.html . 

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K-State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the well-being of Kansans. Supported by county, state, federal and private funds, the program has county Extension offices, experiment fields, area Extension offices and regional research centers statewide. Its headquarters is on the K-State campus, Manhattan.

Story by:
Nancy Peterson,
nancyp@oznet.ksu.edu
K-State Research& Extension News