Many Kansans are eligible for significant financial benefits from a special federal tax credit for working people who earn low or moderate income. Those same working people may also be eligible for a state tax credit begun in 1998.

The federal Earned Income Tax Credit (EIC) is a refundable credit which could provide up to $3,816 to eligible citizens. Workers who are eligible for the federal EIC may also be eligible for the state of Kansas EIC, which is equal to 1 0 percent of the federal earned income tax credit.

The EIC has several important purposes: to reduce the tax burden on low-income workers, to supplement family wages, and to make work more attractive than welfare.

The Kansas Department of Social and Rehabilitation Services (SRS) works with families eligible for pubic assistance because of poverty. The agency is working to inform people they may be eligible for both the federal and state EIC. With the emphasis SRS has placed on helping to move people from public assistance to work, the tax credit may be especially helpful for people as they obtain and maintain employment.

"Many people receiving public assistance work at low-paying jobs," said SRS Secretary Janet Schalansky. "For them, the Earned Income Credit offers a chance to get ahead and move toward self-sufficiency."

Workers who qualify for the EIC and who file a federal income tax return can get back some or all of the federal income tax taken out of their pay during the year. They may also get extra money back from the government. Even workers whose earnings are too small to have to pay taxes can get the EIC.

Examples of EIC payments include the following:

*Workers who were raising one child in their home and had family income of less than $26,928 in 1999 can get an EIC of up to $2,312.

*Workers who were raising more than one child in their home and had family income of less than $30,580 can get an EIC of up to $3,816.

*Workers who were not raising children in their home but were between the ages of 25 and 64 on December 31, 1999 and had income below $10,200 can get an EIC of up to $347.

The EIC does not affect benefits like food stamps, Supplemental Security Income (SSI), Medicaid, or public housing.

To get EIC, a family files an IRS tax return using form 1040 or 1040A (not the 1040EZ) plus a 'Schedule EIC' Even families who would not otherwise have to file a tax return must do so in order to receive an EIC. For families who may already have filed this year, an amended return with Schedule EIC is necessary to receive the EIC benefit.

All these forms are available from the Internal Revenue Services (IRS).

Qualifying adults without children may receive the EIC by filing form 1040, 1040A, or 1040EZ and writing 'EIC' on the Earned Income Credit line of the tax fon-n.

Workers can get the EIC in one check from the IRS after they file a return. But for workers caring for a child or children, there is another choice that can be of benefit to both the worker and his or her employer all year long. It is called the 'advance EIC payment.' Employers can add part of a workers' EIC to every paycheck, and the worker gets the rest of the credit after filing a tax return. This benefits employers because they are able to increase an employee's takehome pay at virtually no cost to the business. The EIC advance payment benefit is begun by the employee by filing a W-5 form with the employer, who is required by law to provide the EIC payment to eligible workers.

For more information about the EIC, contact the IRS toll-free at 1-800-829-1040. For more information about the Kansas EIC, call TEL-ASSIST at 1-800-259-2829.

Workers who are eligible for the EIC who do not feel comfortable filling out their tax forms themselves or who want to avoid paying a commercial tax preparer can get help through the free, IRS-sponsored Volunteer Income Tax Assistance program, or VITA.

VITA is designed to help low-income workers, including anyone eligible for the EIC, fill out their tax forms. VITA sites are open from late January or early February through April 15. VITA sites are located in churches, libraries, shopping malls, state office buildings, community colleges and many others. Call the IRS at 1-800-829-1040 to find a VITA site in your area.

Page Last Updated: May 29, 2001