By Sam Park, 2017 Get It Back Campaign Intern
Every working parent should know about the Earned Income Tax Credit (EITC), a tax benefit that can mean extra money back in your tax refund.
The EITC provides up to nearly $7,000 for workers who earn low to moderate incomes. The EITC has tremendous impact beyond helping about 30 million workers and families make ends meet. This incredible tax credit has been proven to have lasting benefits for working parents and their children.
Here are four reasons why you should know about the EITC if you’re a working parent.
1. It’s easy to claim the EITC
If you’re filing your own tax return, fill out the Schedule EIC with your Form 1040. The easiest way to claim the EITC, however, is to go to an IRS-sponsored free tax site, where trained volunteers prepare your taxes and help you claim all the benefits you’re eligible for. You can enter your zip code here to find free tax prep in your area.
This EITC Estimator can help you figure out how much your tax credit may be.
2. It’s good for your kids
In addition to providing relief from poverty, the EITC helps children succeed in multiple stages of life. Research shows that the EITC improves kids’ school performance, increases their chances of attending college, and correlates with higher earnings in adulthood. Children benefitting from the tax credit, which averages $3,000 (in 2005 dollars), improved their educational achievement by an equivalent of two extra months of school.
3. The EITC supports maternal and children’s health
The EITC helps improve the health of mothers, which directly improves children’s health. Children in families that earn higher EITC refunds are likelier to avoid the early onset of disabilities and other illnesses associated with child poverty.
4. Single mothers benefit
The EITC is impactful for single mothers, and encourages single mother employment. Higher employment and earnings also leads to increased social security retirement funds and better financial security for elderly women.