by Amber Wallin
January 30, 2015
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 $6,143.
Today is National EITC Awareness Day, a nationwide effort to increase public awareness about the benefits of the federal EITC, which is available to low- and middle-income working families. It helps people who work hard meet basic needs for food and transportation and provide for their children. New Mexico’s Working Families Tax Credit (WFTC) is based directly on the EITC and provides additional benefits for New Mexico’s working families and communities. It can be worth up to $614 for those who qualify for the EITC.
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 and does make a big difference. Last year alone, New Mexico’s working families received nearly $500 million from the federal EITC and nearly $50 million from New Mexico’s WFTC. The average amount New Mexicans received last year was $2,600 when the two refunds are combined. That’s money working families are very likely to spend quickly and locally at businesses in their own communities, so it’s good for the state’s economy too.
The amounts of the EITC and WFTC vary by income, family size, and filing status. The credits are for workers whose earned income does not exceed the following limits:
- $46,997 (or $52,427, if married and filing jointly) with three or more qualifying children
- $43,756 ($49,186, if married and filing jointly) with two qualifying children
- $38,511 ($43,941, if married and filing jointly) with one qualifying child
- $14,590 ($20,020, if married and filing jointly) with no qualifying children
The online EITC Assistant can help determine your filing status and eligibility, and will help you estimate the amount of your federal credit. This help is available in both English and Spanish. 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 incentivize hard work, help working people families, and drive economic activity in 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.