Look for credits when filing taxes

Look for credits when filing taxes

Although many Rice employees take advantage of the Earned Income Credit each year, many more may not even be aware that they qualify for this tax benefit.

The Earned Income Credit (EIC) is a special tax benefit for people who work full or part time. Those who qualify will owe less in taxes and may get cash back. Even those who don’t owe income tax can get the credit. But to get it, they must file a federal tax return.

Who can get the EIC?

• Workers who were raising children in their homes and who earned less than $34,458 ($35,458 for married workers) in 2004 can receive an EIC up to $4,300.

• Workers who were raising only one child and who earned less than $30,338 ($31,338 for married workers) can receive an EIC up to $2,604.

• Workers between ages 25 and 64 who were not raising children in their homes and who earned less than $11,490 ($12,490 for married workers) in 2004 can receive an EIC up to $390.

How do workers get the EIC?

• Workers raising a “qualifying child” in 2004 must file either Form 1040 or 1040A and must fill out and attach Schedule EIC. Workers with children cannot get the EIC if they file Form 1040EZ or do not attach Schedule EIC. Married workers must file a joint return to get the EIC.

• Workers who were not raising a “qualifying child” in their homes in 2004 can file any tax form — including the 1040EZ. These workers should write “EIC” (or the dollar amount of their credit) on the Earned Income Credit line on the tax form. They do not file Schedule EIC.

Workers raising children can get part of their EIC in their paychecks throughout the year and part in a check from the Internal Revenue Service after they file their tax returns. Through the EIC Advance Payment option a worker can get up to $60 extra in each biweekly paycheck. To get EIC Advance Payments, eligible workers can submit a Form W-5 to the Payroll Office, second floor of Allen Center. The W-5 form is available in the Payroll Office. This form can be submitted anytime, but it expires Dec. 31 every year. The form must be resubmitted to the Payroll Office each year for it to stay in effect.

Finally, many families that earned more than $10,750 may qualify for the Child Tax Credit refund — up to $1,000 for each dependent child under age 17 — in addition to the EIC for which they may qualify.

To find out more information about these programs and whether you qualify, contact your tax preparer or contact the IRS at <www.irs.ustreas.gov> or 800-829-1040.

To request more information — but not tax advice — call Human Resources’ Celeste Boudreaux, 713-348-6323.