Money in the bank: A few of the most frequently unclaimed tax credits

The average Earned Income Tax Credit distribution in Georgia last year was $2,300. Yet, nearly 25 percent of eligible residents left the money in federal government coffers.

In 2009, nearly one million taxpayers in Georgia got their hands on $2.2 billion in EITC benefits. The EITC has expanded this year to include larger families. Plus, financial setbacks substantially reduced the annual salaries of many in the state. That means many who ordinarily would not have qualified for the EITC, are now eligible.

On EITC Awareness Day last week, Congressman John Lewis, Neal Wolin, Deputy Secretary of the Treasury Department, and IRS Deputy Commissioner Steve Miller were among those at the Atlanta Workforce Development Agency beating the drum in an effort to encourage taxpayers to get the money they are entitled to.

“People are struggling to get by, losing jobs and homes, and struggling to put food on the table,” Lewis said. “The earned income tax credit can make all the difference for citizens in Atlanta, in Georgia and all across America…It has the power to lift people out of poverty, so we’re here to get the word out and get this money to the people who deserve it.”

Wolin said the refunds could potentially stimulate the economy as well, as people spend it on necessities. Though the EITC has existed for 35 years, alerting the newly eligible is a priority.

“It’s based on income, so if you or your spouse lost a job or you had to take a cut in pay, it may be where you qualify now,” Miller said. “Life circumstances change, so you could fall in and out of [eligibility.]

While it is the largest of the tax credits that go unclaimed, it is not the only one. This year in particular there may be additional monies available to taxpayers. Here are just a few. For details on these and others, see IRS.gov.

– Energy upgrades: The energy tax credit is for homeowners who make energy efficient improvements to their existing homes. The maximum credit limit is raised $1,500 for improvements placed in service in 2009 and 2010.

– Homebuyer credit: First-time home buyers can get a credit up to $8,000 and long-time residents who purchase new homes are entitled for a credit up to $6,500.

– Vehicle Sales Tax Reduction: Taxpayers who bought certain new vehicles after Feb. 16, 2009 and before Jan. 1, 2010 can deduct the state and local taxes they paid.

– Real Estate Taxes: Even if you don’t itemize deductions, for 2009 you can still deduct amounts paid for state and local real estate taxes.

– Education: If you paid college expenses for yourself, your spouse or a dependent, you may be able to claim one of the two education credits, including the new American Opportunity Tax Credit worth up to $2,500.

– Unemployment compensation: The first $2,400 of unemployment benefits in 2009 are tax free