Income tax credit extends its reach

Tax credit is expected to benefit more low-income workers.

More people are expected to qualify for a tax credit aimed at low-income workers this year -- and they will be taking home more money this time around.

Job losses and pay cuts likely pushed more people into income levels where they qualify for the Earned Income Tax Credit when filing their 2009 taxes, IRS representatives said Friday.

The credit is geared toward working people, including those who earn so little that they are not required to file taxes.

Last year, 187,000 taxpayers in the six-county central San Joaquin Valley region received $427 million from the program. About $50 billion was paid out nationwide last year. The average credit was more than $2,000.

Taxpayers can get the money even if they paid very little in taxes, IRS director of electronic tax administration and refundable credits David R. Williams said in a conference call Friday.

"If you don't owe money, we will still send you a check for the value of the EITC," he said.

The American Recovery and Reinvestment Act pumped more money into the program for the 2009 and 2010 tax years.

This year, the maximum credit has risen to $5,657 for families with three or more children. That is higher than last year's maximum credit of $4,824 for taxpayers with two or more children.

But the IRS contends that up to 25% of eligible people still won't take advantage of the credit.

For that reason, the agency and several Valley nonprofit organizations are kicking off campaigns to publicize the tax credit and help people file their taxes for free.

"There are a lot of people here in the Valley that have been missing out on the money," said Nemo Mendoza, EITC lead coordinator at Central California Legal Services Inc.

He said that many people erroneously believe they need to meet a minimum income threshold to qualify, or that receiving unemployment benefits might leave them ineligible, but many of those people actually do qualify for the credit.

Single people, nontraditional families such as grandparents raising grandchildren and childless workers also qualify. People who do not have children can qualify for up to $457.

Central California Legal Services already has seen a 20% increase in the people coming into its office for help, said Manuel Romero, director of special projects. That could be due to more people qualifying or more people learning about the credit.