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8A Daily News – Friday, March 9, 2012 Earned Income Tax Credit for 2011; Do I qualify? Special to the DN The Earned Income Tax Credit (EITC) is a financial boost for people working hard to make ends meet. Millions of workers may qualify for the first time this year due to changes in their marital, parental or finan- cial status. The IRS urges everyone earn- ing $49,078 or less from wages, self-employment or farming in 2011 to see if they qualify by using the EITC Assistant on IRS.gov. To get the credit you need to file a return and specifi- cally claim the EITC, even if you aren't required to file. The EITC is a refundable tax credit. This means you may get money back, even if you have no tax withheld. Nationwide last year, almost 26.8 million eligible individuals and families received over $59.5 billion total in EITC. Many special rules apply to the EITC. So if you plan to claim it, either on a return you prepare or someone else prepares for you, review the rules carefully. Most people who qualify for the EITC also qualify for free tax preparation through the IRS Free File system, or at a local tax help site staffed by trained communi- ty volunteers. Generally, the EITC has no effect on welfare benefits. In most cases, EITC payments will not be used to determine eligibil- ity for Medicaid, Supplemental Security Income (SSI), supple- mental nutrition assistance pro- gram (food stamps), low-income housing or most Temporary Assistance for Needy Families (TANF) payments. Though unemployment benefits are not earned income, they are taxable and thus affect the amount of EITC you can receive. Credit Limits for Tax-Year 2011 The EITC varies based on income and family size. The table showing credit amounts can be found in the Instruction booklets for Forms 1040, 1040A and 1040EZ and in Publication 596, Earned Income Credit. This includes the expanded benefit, available through 2012, for fam- ilies with three or more children. For tax year 2011, the maxi- mum credit amounts are: • $464 with no qualifying children child children • $5,751 with three or more qualifying children As the list above shows, not everyone qualifies for the maxi- mum credit. Last year, the aver- • $3,094 with one qualifying • $5,112 with two qualifying age credit was $2,200. Eligibility for EITC Besides filing a tax return, people must meet various requirements. Some of these requirements apply to everyone. Then there are additional requirements that only apply to families, and another set of requirements that only apply to people without children. Rules for Everyone: • You must have earned income, such as wages, tips or the income you make from run- ning a business or farm. Most other types of income, such as retirement pensions, though usu- ally taxable, do not count as earned income. • You must have a valid Social Security number for your- self, your spouse and your qual- ifying children. • You can get the credit, even if you have a small amount of investment income, such as interest from a bank account. However, the amount of your investment income is limited to $3,150. • Your filing status must be single, head of household, mar- ried filing jointly or qualifying widow or widower. If you file as married filing separately, you cannot get the credit. • Generally, you must be either a U.S. citizen or resident alien. • You cannot be a qualifying child of another person. • You cannot file Form 2555 or Form 2555-EZ. These forms are used to claim the foreign earned income exclusion, a tax benefit for Americans who live and work abroad. In addition, your income must be below certain limits. For tax year 2011, both earned income and adjusted gross income (AGI) must each be less than: • $13,660 ($18,740 married filing jointly) with no qualifying children • $36,052 ($41,132 married filing jointly) with one qualify- ing child • $40,964 ($46,044 married filing jointly) with two qualify- ing children • $43,998 ($49,078 married filing jointly) with three or more qualifying children Special Rules for Families If you claim the credit, based on having one or more qualifying children, each child must meet the relationship test, age test and residency test. Each child must meet all three tests. Relationship test. The child is your: Free alternative fuel class Transfer Flow will be conducting a no-cost, 2-day Alternative Fuel Training class at its Chico facility 3-6 p.m. Friday, March 23 and 8 a.m. to 5 p.m. Saturday, March 24. The class is funded by the California Energy Com- mission's Alternative and Renewable Fuel and Vehicle Technologies Program, with the intention of deploying alternative fuels to decrease air and water pollutants, while reducing the environmental impact of modern transportation. The class is designed to educate college students, fleet managers, auto mechanics, first responders, ser- vice & maintenance personnel, and others about the characteristics and benefits of alternative fuelss. The class is at Transfer Flow's manufacturing facili- ty, 1444 Fortress St. in Chico. Lunch will be provided on Saturday, and attendees will receive two training certificates upon completion of the class, plus the train- ing books. Seating is limited. To register, call Warren Johnson at (530) 893-5209, ext. 12. Visit wwww.trans- ferflow.com for additional information. Victory Gardening 101 Class Series Class #2: Saturday, March 10th @ 10:00 am Class #3 Saturday, March 17th @ 10:00 am Please call to reserve a seat thank you • Son or daughter, including an adopted child or child placed for adoption, • Stepchild or grandchild, • Foster child placed by an authorized placement agency or court, • Brother, sister, stepbrother, stepsister, half brother, half sister or a descendant of any of them. Age test. At the end of 2011, the child was younger than you or your spouse. And: • Younger than 19, • Younger than 24 and a full- time student, or • Any age if permanently and totally disabled Residency test. The child lived with you in the U.S. for more than half of 2011. In addi- tion, if a qualifying child files a joint return, he or she can only do so to claim a refund. • A qualifying child cannot be used by more than one person to claim EITC. If a child meets the rules to be a qualifying child of more than one person, only one person can use that child to claim the EITC. Also, if a quali- fying child can be claimed by both a parent and another per- son, the other person can only get the credit if his or her AGI is higher than the parent's. Special Rules for People Who Have No Children. Tax- payers without a qualifying child must meet three additional tests: • Lived in the U.S. for more than half of 2011, • At the end of 2011, was at least age 25, but under age 65, • Cannot qualify as the depen- dent of another person. Special Rule for Combat Pay. Combat pay received by mem- bers of the military serving in Afghanistan, Iraq and other combat zone localities is usually exempt from tax. But under a special rule, you can choose to count all of this income when you figure the EITC. In many cases, making this choice will enable you to claim the credit, or if you are already eligible, claim a larger credit. Avoid Errors and Seek Accu- racy Even if someone else pre- pares your tax return, you are still responsible for the accuracy of your return. Because the EITC can be complex, many people claiming it make mis- takes. Get help if you are not sure you qualify. Common errors include: • Claiming a child who is not a qualifying child. • Filing as single or head of household when you are actually married. • Reporting incorrect income amounts. • Missing or incorrect Social Security numbers for you, your spouse or your qualifying chil- dren. If you receive an IRS letter requesting additional informa- tion, reply immediately to avoid delaying your refund. If you need help, call the phone num- ber shown in the letter. The Right Credit Amount for Those Eligible Some people who claim the EITC either figure it incorrectly or are ineligible. A deliberate error can have lasting impact. Beware of scams promising to increase an EITC refund. Creat- ing fictitious qualifying children or inflating income levels to get the maximum EITC are scams that may result in severe penal- ties. Among other things, you could be banned from claiming the credit for up to ten years. If an EITC claim was reduced or denied after tax year 1996 for any reason other than a mathe- matical or clerical error, you must attach Form 8862, Infor- mation To Claim Earned Income Credit After Disallowance, to your next return to claim the credit. Almost two out of three EITC claims are prepared by tax pro- fessionals. To help ensure that only those eligible get the credit and that everyone who is eligible gets the right amount, the IRS now requires paid preparers to file Form 8867 with any federal return claiming the EITC. This is the same due diligence check- list that for over a decade prepar- ers have been required to use for determining a client's eligibility and then retain in their records. This year, the IRS wants to remind all taxpayers that they should use only preparers who sign the returns they prepare and enter their Preparer Tax Identifi- cation Numbers (PTINs). How to Claim EITC Publication 596, Earned Income Credit, explains the process. The publication is avail- able on IRS.gov or by calling 800-829-3676. The Instructions for Form 1040 can help you determine your eligibility. The instructions contain a worksheet and the earned income credit table to help you determine the amount of your credit. If you are claiming the EITC with a qualifying child, you must complete Schedule EIC and attach it to your tax return. Schedule EIC pro- vides IRS with information about your qualifying chil- dren, including their names, ages, SSNs, relationship to you and the amount of time they lived with you during the year. How to Get Tax Help See if you qualify by using the EITC Assistant on the IRS website, available in English and Spanish. Taxpayers who qualify for EITC should consider free tax preparation services. Many community and nonprofit organizations provide free tax return preparation for low- income and elderly taxpayers at more than 12,000 volunteer sites nationwide. To locate the nearest VITA site, taxpay- ers should call the IRS at 800-906-9887. Taxpayers can also call their community's 211 or 311 line for local ser- vices. Other options include Free File, the free tax preparation and electronic filing program available at IRS.gov and pro- vided by software companies. Many e-file software providers and tax profession- als also provide free services for low income taxpayers. Remember, you can get faster access to your refund by using direct deposit. The IRS can generally issue refunds to taxpayers who combine e-file and direct deposit in as few as 10 days. Other Resources • Pub 596, Earned Income Tax Credit offers a detailed overview of EITC, the eligi- bility rules and instructions on how to claim it. • IRSvideos, available on YouTube, provide informa- tion about credits, deductions and tax law changes. The IRS also has videos in Spanish (IRSvideosMultilingua) and American Sign Language (IRSvideosASL). • IRS audio files, informal tax messages in English and Spanish, to use for podcasts or to play on a portable device. These are also avail- able by subscription through iTunes. • @IRSnews and @IRSenEspanol, the IRS Twitter news feeds, provide the latest federal tax news and information for taxpayers in English and Spanish. • IRS2Go, the IRS smart- phone app, which gives tax- payers an on-the-go way to check on their federal tax refund, get tax help and more. • FS-2012-5, the IRS helps taxpayers choose a paid pre- parer wisely with these tips to keep in mind. BLM seeks public input on OHV grants The public is invited to comment on the Bureau of Land Manage- ment's 2012 grant appli- cations submitted to the California Department of Parks and Recreation Off-Highway Motor Vehicle Recreation Divi- sion. The public review and comment period will run through Monday, April 2. The annual OHV grant applications are a key part of the partner- ship between BLM and the State of California, which issues grants to a variety of entities to improve or mitigate off- highway vehicle recre- ation. California State Parks' OHV program will be accepting grant applications from a num- ber of agencies including federal agencies, county and city law enforce- ment and parks depart- ments, and non-profit organizations. This year, over $27 million is available for allocation. BLM applies for grants from the state each year $ 15 Off regular price With this ad! • Same Day Service • Free E-File • Check Our Price • Over 45 Years Experience P. Ralph Campbell, EA Enrolled Agent Daniele Jackson 530-529-9540 855 Walnut St. #2, Red Bluff Daily and affordable classes: AHA/HCP or Pro-CPR Daycare EMS Approved Pediatric CPR/First Aid Industrial OSHA Approved CPR/First Aid Public Adult CPR & First Aid Wilderness First Aid Babysitting Safety Youth Water Safety 530-527-4997 80 Gurnsey Ave. - Red Bluff, CA 96080 (Behind Guy Rents) margescpr@juno.com to help fund and coordi- nate its OHV program. View the applications online at OHMVR's website at http://ohv.parks.ca.gov/. Copies are also available at BLM's field offices in Alturas, Arcata, Bakers- field, Barstow, Bishop, Cedarville, El Centro, Folsom, Needles, Palm Springs, Redding, Ridge- crest, Susanville, and Ukiah, as well as the BLM California Desert District Office in Moreno Valley, and the state office in Sacramento. Information is also avail- able on BLM's website at http://www.blm.gov/ca/s t/en/prog/recreation.html . The draft 2012 BLM Albertson Training Center Have a news tip? Call 527-2151, Ext. 112 applications will encom- pass more than 50 pro- jects, ranging from law enforcement, facility developments, trails pro- jects, restoration work and other OHV related projects proposed throughout BLM's 16 field offices in the state. Jim Keeler, BLM OHV coordinator, said the BLM is also reaching out to interested publics through mailings, public meetings, personal con- tacts, and through BLM- California's e-newsletter, News.bytes. For further details on BLM's grant applications, contact Keeler at (916) 978- 4654 or email, james_keeler@ca.blm.g ov. The potatoes have arrived Red Bluff Garden Center 527-0886 766 Antelope Blvd. (Next to the Fairground)