United Way of Williamson County

Earned Income Tax Credit (EITC)

United Way of Williamson County is working to educate area low-income families about the EITC (Earned Income Tax Credit).

Hard-working families earning less than $38,000 annually may qualify for the Earned Income Tax Credit. Each year, that money is lost to these families and to the local economy when they do not file for their Earned Income Tax Credit at tax time. In addition, these families pay high fees to commercial tax preparation firms that offer Refund Anticipation Loans (RALs) or “rapid returns.”

For tax time in 2008, AARP and VITA sites around Williamson County will be set-up to provide low-income working families with free tax preparation help and links to other financial opportunities. The following is a list of planned locations in 2008.

College Grove Senior Center (New in 2008)
8607 Henry Horton Highway, College Grove, TN 37046

Fairview Public Library
2240 Fairview Blvd., Fairview, TN 37062

The Martin Center (AARP)
960 Heritage Way, Brentwood, TN 37027

MidCumberland Community Action Agency-Williamson Co. (VITA)
129 W. Fowlkes St., Franklin, TN 37064

Shorter Chapel AME Church (VITA)
255 Natchez St., Franklin, TN 37064

Williamson County Library (VITA)
1314 Columbia Ave., Franklin, TN 37064

Williamson County Library (AARP)-on separate schedule from above site
1314 Columbia Ave., Franklin, TN 37064
Call reference desk for appointment: 615/595-1243

Anyone wishing to utilize an EITC site or find out more just has to dial 2-1-1.

Do You Qualify for EITC?
To qualify, you must meet certain requirements and file a U.S. Individual Income Tax Return. As described below, some EITC rules apply to everyone. There are also special rules for people who have children and for those who do not. This information was prepared for the 2007 tax season.

Individuals and families must meet certain general requirements:

You must have earned income.
You must have a valid Social Security Number for yourself, your spouse (if filing jointly) and your qualifying child.
Investment income is limited to $2,900.
Your filing status cannot be "married filing separately."
Generally, you must be a U.S. citizen or resident alien all year.
You cannot be a qualifying child of another person.
You cannot file Form 2555 or Form 2555-EZ (related to foreign earned income.)
Your income cannot exceed certain limitations.

For Tax Year 2007, earned income and adjusted gross income (AGI) must each be less than:

$37,783 ($39,783 if married filing jointly) with two or more qualifying children;
$33,241 ($35,241 if married filing jointly) with one qualifying child;
$12,590 ($14,590 if married filing jointly) with no qualifying children.

If you claim a child, he or she must meet three eligibility tests:

Residency Test - The child must have lived with you in the United States for more than half of 2007.
Relationship Test - The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them. Your child includes:
A foster child who was placed with you by an authorized placement agency, or by judgment, decree, or other order of any court of competent jurisdiction.
A legally adopted child or a child lawfully placed with you for legal adoption
Age test - At the end of 2007, the child must have been under age 19, a full-time student under age 24 or any age if permanently and totally disabled at anytime during 2007. Your 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 treat that child as a qualifying child and claim EITC.

If you don't have a child, you must meet three additional tests:

At the end of 2007, you must have been at least age 25, but under age 65.
You cannot qualify as the dependent of another person.
You must have lived in the United States for more than half of 2007.

Credit Limits for 2007 Tax Year

Income and family size determine the amount of the EITC. The Earned Income Credit Table, which shows the credit amounts, is included in the Instruction booklet for Form 1040 and in Publication 596, Earned Income Credit.

Tax Year 2007 maximum credit:
$4,716 with two or more qualifying children;
$2,853 with one qualifying child;
$428 with no qualifying children.

Investment income must be $2,900 or less for the year.

The maximum Advance Earned income Tax Credit (AEITC) for TY 2007 the employer is allowed to provide through the year with the employee's pay is $1,712.