Nationally, the IRS estimates that between 20 and 25 percent of qualified Americans do not claim the EITC. In Indiana, the IRS estimates that 15 percent or more of qualifying Hoosiers do not apply for the EITC.

In addition, taxpayers who qualify can retroactively claim an additional three years of the EITC, as long as they file their taxes before April 15. This is money that hard working Hoosiers already have earned and can save or put back into the economy.

According to the IRS, more than 793,018 Hoosiers claimed the federal EITC in 2008 for refunds totaling $ 981.5 million.

Enacted by Congress in 1975, the EITC is a refundable tax credit available to families with a working member where the family income falls below a certain level. The EITC was designed to decrease the tax burden and supplement wages, as well as provide incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax credit for those taxpayers who qualify and claim the credit.

To qualify for the EITC, taxpayers must file a tax return, even if they are not required based on income, and meet ONE of the following income qualifications for 2009:

• Have three or more children with earned income less than $ 43,279 if single or $ 48,279 46 if married and filing jointly;

• Have two children with earned income less than $ 40,295 if single or $ 45,295 if married and filing jointly;

• Have one child with earned income less than $ 35,463 if single or $ 40,463 if married and filing jointly;

• Have no children with earned income less than $ 13,440 if single or $ 18,440 if married and filing jointly.

In addition to meeting one of the income qualifications, taxpayers must meet ALL of the following requirements:

• Must have a valid Social Security Number

• You must have earned income from employment or from self-employment.

• Your filing status cannot be married, filing separately.

• You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

• You cannot be a qualifying child of another person.

• If you do not have a qualifying child, you must: a) be age 25 but under 65 at the end of the year, b) live in the United States for more than half the year, and c) not qualify as a dependent of another person.

• Cannot file Form 2555 or 2555-EZ (related to foreign earn income)

• EITC Thresholds and Tax Law Updates

• Special rules may apply

Those who meet the qualifications for federal EITC may also be eligible for the State of Indiana’s EITC. The Indiana earned income credit is 9 percent of the earned income credit you claimed on your federal income tax return. For additional information on Indiana’s EITC please visit http://www.in.gov/dor/3803.ht m#earnedincome.

For assistance in determining eligibility, taxpayers may use the EITC Assistant, a new web-based tool, available at http://www.irs.gov. By providing basic information, this program will assist taxpayers with filing status, determining eligibility and estimating the amount of credit you may receive.

Taxpayers may request a free copy of Publication 596 Earned Income Credit by calling the IRS at 1-800-829-3676.