One of the largest benefit programs for working families is also one of the most overlooked. It’s called the Earned Income Tax Credit (EITC) and, as the name implies, it’s for people who work for a living but don’t make a lot of money.

Rural residents, self-employed people such as farmers, childless workers and grandparents raising grandchildren are among those who may be eligible, but often fail to claim EITC. [2] You could receive a credit of up to $5,657 when you file your 2009 taxes. If you are owed a refund, this credit would increase the amount you receive. If you owe taxes, the credit may lower or eliminate the amount of tax you have to pay. You could use this money to catch up on bills, build up your savings or open a bank account.

IRS income eligibility guidelines

In addition you:

• Must have a valid social security number for each individual listed on your tax return.
• Must have earned income from employment or from self-employment.
• Cannot file taxes using the “married filing separately,” status.
• 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 tax return.
• Cannot be a qualifying child of another person.

If you do not have a qualifying child, you must:

• Be age 25 but under 65 at the end of the year,
• Live in the U.S. for more than half of the year,
• Not qualify as a dependent of another person.

It is clear to see how EITC can make life a little easier in these hard times. A married couple with three children and an income ranging from $12,570 to $21,420 could be eligible for the maximum tax credit of $5,657.   Taxpayers making as much as $48,279 could qualify for EITC and can get tax returns prepared for no charge at a Volunteer Income Tax Assistance site or AARP Tax Assistance site in their local community. Many communities offer 211 or 311 telephone numbers to locate vital services. If not, you can call the IRS volunteer assistance locator number at 1-800-906-9887 to locate free tax assistance in your community.

[2] Internal Revenue Service, Final Breath Easier. http://www.eitc.irs.gov/public/site_files/FINAL_BREATH_EASIER_7×10_local.pdf

For 2008 the amount of income you can earn to claim the credit has increased as found on the IRS website:

• More than 1 child with income less than $38,646 and $41,646 if married filing jointly,
• 1 child with income less than $33,995 or $36,995 if married filing jointly,
• No child with income less than $12,880 or $15,880.

To be eligible for the EITC you must file a tax return and meet certain requirments:

• You must have a valid Social Security Number,
• have earned income from employment or self-employment,
• filing status cannot be married, filing separately,
• must be a U.S. citizen or resident alien all of 2008,
• or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.

If you do not have a qualifying child, you must:

• be age 25 but under 65 at the end of the year,
• live in the United States for more than half the year,
• and not qualify as a dependent of another person.

The Volunteer Income Tax Assistance Program (VITA) offers free tax help to low-to-moderate-income (generally, $42,000 and below) people who cannot prepare their own tax returns. Certified volunteers sponsored by various organizations receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls, and other convenient locations. Most locations also offer free electronic filing.

AARP is participating in the Tax Counseling for the Elderly Program which provides free tax help to people 60 and older that are of low-to-middle income. The program provides free tax counseling and basic income tax return preparation.

To locate the nearest VITA or AARP site, call 1-800-829-1040.

Visit the IRS website to determine if you qualify for the EITC.

It’s your money – go claim it!