CITYWIDE — In the 2011 tax year, Santa Monicans claimed more than $5 million under the Earned Income Tax Credit, but officials with the Internal Revenues Service believe the number could have been higher.
They estimate that 20 percent of people who qualify for the tax credit do not claim it. An awareness campaign was launched Friday by the IRS to help those who are considered low- and moderate-income get the refunds they deserve.
Tax Credit Awareness Day is aimed at the millions of Americans who earned $50,270 or less, urging them to take advantage of the Earned Income Tax Credit, created in 1975. Across the country, local officials and community organizations are sponsoring outreach events that highlight the benefit of this work incentive.
Each year, one in five people who are eligible miss out on the refund either by being unaware and not claiming it or by not filing taxes at all.
“A large part of the nation sees major changes every year with their tax situation,” said IRS Acting Commissioner Steven T. Miller. “This year, millions of workers could qualify for [the credit] for the first time, and the IRS urges them not to overlook this valuable credit.”
In Santa Monica, the most tax income credit received in 2011 went to residents living in the 90404 and 90405 zip codes with $2,217,939 and $1,620,980, respectively. This is based on the number of residences in that area and the demographics of the families who live there.
Workers who earned less than $50, 270 last year and are single could qualify for up to $475; $5,891 for workers who have three or more children. And unlike most deductions and credits, the Earned Income Tax Credit is refundable, so those who are eligible may receive a refund from the IRS even if they don’t owe taxes.
If a person is not required to file a tax return but wants to know if he or she is eligible for the credit, a tax return should be filed any way and should specifically claim the credit. Taxpayers who qualify can begin to file claims with their federal tax return starting Jan. 30.
For more information on the tax credit and detailed eligibility rules visit www.irs.gov/eitc.