Qualified Taxpayers Can Receive up to $6,269 by Filing with the IRS
ALEXANDRIA, Va. (Jan. 27, 2017) – The National Credit Union Administration is joining the Internal Revenue Service and other federal agencies to remind qualified taxpayers about the potential benefits of applying for the Earned Income Tax Credit.
Many EITC filers will get their refunds later this year than in past years. A change in federal law requires the IRS to hold refunds claiming the EITC and the Additional Child Tax Credit until mid-February. The IRS will begin releasing these refunds Feb. 15, but refunds may not begin arriving in bank accounts or on debit cards until the week of Feb. 27. Taxpayers should be aware some financial institutions do not process payments on weekends or holidays, which can affect when they receive their refunds.
The EITC is a federal income tax credit for working people with low to moderate incomes ($53,505 or less for 2016) who meet certain eligibility requirements. Because it is a refundable credit, taxpayers who qualify and who claim the credit could pay less federal tax, pay no tax or even receive a refund. Congress originally approved the tax credit in 1975 to partially offset the burden of Social Security taxes and to provide an incentive to work. Income and family size usually determine the amount of credit, but individuals without children may also qualify.
The maximum refund for the 2016 tax year is $6,269 for a household with three or more qualifying children. Consumers can find updated information about the EITC on NCUA’s consumer website, MyCreditUnion.gov, which has a webpage dedicated to explaining the tax credit.
NCUA is issuing this reminder in conjunction with EITC Awareness Day, a nationwide effort to raise awareness about the EITC and the availability of free tax preparation assistance. Many credit unions offer their members help with preparing tax returns or participate in the Volunteer Income Tax Assistance program, an IRS-sponsored program that provides free tax-filing assistance. Credit union members who would like help are encouraged to contact their credit union to find out what resources are available.
Under the Federal Credit Union Act, promoting financial literacy is a core credit union mission. While credit unions serve the needs of their members and promote financial literacy within the communities they serve, NCUA works to reinforce credit union efforts, raise consumer awareness and increase access to credit union services.
NCUA also participates in national financial literacy initiatives, including the Financial Literacy and Education Commission, an interagency group created by Congress to improve the nation’s financial literacy and education.