Millions of dollars in Earned Income Tax Credits go unclaimed each year – is some of it yours?

  • January 23, 2019

The federal Earned Income Tax Credit (EITC) is a benefit for working people with low- to moderate-incomes.

OLYMPIA, WA — Workers in Washington earning up to $54,884 may be eligible to receive the federal Earned Income Tax Credit (EITC), but many do know about or claim the benefit, according to the state Department of Commerce. Individuals must file a tax return with the IRS to get the credit, even if no tax is owed or filing a tax return is otherwise not required.

The credit reduces the amount of taxes owed and results in a lump sum refund payment for most people who are eligible to claim it. Many workers become eligible for this tax credit each year, but the IRS estimates 20 percent of them either do not claim the benefit on their taxes or do not file a tax return at all.

Seniors, individuals with low incomes and non-English speaking taxpayers account for much of the unclaimed credits because they don’t realize they are eligible.

Gov. Jay Inslee proclaimed Friday, Jan. 25, 2019 “Earned Income Tax Credit Awareness Day” in the state of Washington as part of a nationwide effort to spread the word about this under-used benefit and provide information and resources to claim it. Read the Governor’s proclamation.

“These tax credits benefit hard-working families and help lift households out of poverty,” Inslee said, “The earnings return to the community immediately and longer term as workers make essential purchases now and contribute to their savings for the future. That’s why it’s so important for Washingtonians to see if they qualify for the Earned Income Tax Credit and the Child Tax Credit (CTC).”

Research suggests the credits improve the health of infants and mothers, and even increase educational outcomes for young children in low-income households, boosting the chances of college enrollment for children in families who receive the EITC. The increased earnings may show up later in life, with increased Social Security retirement benefits, and increasing work and earnings for future generations by 17 percent.

Just over 164,000 Washingtonians were lifted out of poverty by the EITC and CTC, including an average of 81,000 children each year from 2011 to 2013. In 2018, 407,000 Washington residents applied for the credit, claiming $893 million in refunds, for an average refund of $2,194.

This year individuals can receive a tax refund of up to $6,431 if they meet eligibility requirements. Free tax preparation services are available throughout the state. Visit 2-1-1 for more information.

The Department of Commerce and Department of Social and Health Services partner with many local agencies and nonprofit organizations across the state to raise awareness about the Earned Income Tax Credit and promote free tax preparation. Click here for more information

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