Tax credits make life a little easier for working families
by Amber Wallin
January 31, 2014
If you worked but earned less than $47,000 last year, you may qualify for a refundable tax credit called the Earned Income Tax Credit (EITC). It could be worth as much as $6,044.
Today is National EITC Day, a nationwide effort to increase public awareness about the benefits of the federal EITC, which is available to low-income working families. It helps people who work hard meet basic needs, and give their children a better chance to thrive. New Mexico’s Working Families Tax Credit (WFTC) is based on the EITC and provides additional benefits for New Mexico’s working families and communities.
The EITC has been making the lives of workers a little easier since 1975. Yet the IRS estimates that nationwide one in five eligible workers still miss out on the EITC, either because they don’t claim it when filing or they don’t file a tax return. This is money that can make a difference. Last year alone, New Mexico’s working families received nearly $490 million from the federal EITC and an estimated $49 million from New Mexico’s WFTC. The average amount New Mexicans received last year was $2,500 when the two refunds are combined. That’s money working families are very likely to spend at businesses in their own communities, so it’s good for the state’s economy too.
The amount of the EITC varies by income, family size, and filing status. The EITC is for workers whose income does not exceed the following limits:
- $46,227 ($51,567 married filing jointly) with three or more qualifying children
- $43,038 ($48,378 married filing jointly) with two qualifying children
- $37,870 ($43,210 married filing jointly) with one qualifying child
- $14,340 ($19,680 married filing jointly) with no qualifying children
The online EITC Assistant can help determine your eligibility and estimate the amount of your federal credit. Free help preparing your return and claiming the EITC and WFTC is available at volunteer income tax assistance sites such as CNM’s Tax Help New Mexico, which has locations across the state. To find a location near you, visit CNM’s Tax Help website or call 505-224-4829. You may also call the IRS at 1-800-906-9887 for assistance.
People who work full-time should not have to live in poverty. Refundable tax credits like the federal EITC and New Mexico’s WFTC are important boosts to hard-working people and their families, and they allow more funds to flow into New Mexico communities. The credits can and do make working families’ lives a little easier.
Amber Wallin is a Research and Policy Analyst for NM Voices for Children