Good News at Tax Time
Two Hefty Credits Help Working Families
Limited- and moderate-income families may benefit from two substantial tax credits; the Earned Income Credit and the Child Tax Credit.
If you worked during 2007 and earned a low or moderate income, you may be eligible for the Earned Income Tax Credit (EIC), a special tax benefit for full-time, part-time, and temporary workers.
Claiming the EIC will mean that you'll owe less in taxes, and you could get extra money back from both the federal and the state government. Payments vary based on income and family size. Many families will get up to $5,500 this year. You can claim the EIC even if you don't owe income taxes; however, you must file federal and state tax returns. Households with children should file federal form 1040 or 1040A, not form 1040EZ.
Be sure to attach Schedule EIC.
Families may qualify for the federal and state EIC, if, in 2007, they:
• were raising one child and earned less than $33,241 (or less than $35,241, if married)
• were raising two or more children and earned less than $37,783 ($39,783, if married)
• had no children, earned less than $12,590 ($14,590, if married) and were between the ages 25 and 64.
In Maryland, the EIC does not affect benefits such as food stamps, Medicaid, public housing, cash assistance, or SSI.
Families that earned more than $11,750 in 2007 may also be eligible for the refundable Child Tax Credit on their federal tax return. To claim the Child Tax Credit, file federal form 1040 or 1040A, not form 1040EZ. Be sure to attach IRS Form 8812, "Additional Child Tax Credit."
For more information about the EIC and locations for FREE tax preparation, call the United Way’s “First Call for Help” referral service at 211 or 1-800-492-0618, or in Baltimore at 410-685-0525. TTY is available at 410-685-2159.
Tax Breaks Available for Homeowners and Renters
The State Department of Assessments and Taxation administers the Homeowners Property Tax Program and the Renters Tax Credit to help alleviate the costs of property taxes for many elderly, limited- and moderate income residents. Eligible residents have until September 1 to apply, but it is recommended that you file as early as possible. Applications can be obtained any time after February 1or by calling the Tax Credits Telephone Service at 410-767-4433 (Baltimore Area) or 1-800-944-7403 (Toll Free). Visit the state's Website at www.dat.state.md.us for specific program eligibility requirements.
