Thousands of hard-working families may not realize they are eligible for a refundable tax credit when they file their 2014 federal and state income taxes this spring.
As Iowans begin to work on their taxes, eligible families that meet certain income requirements could receive a refund up to $6,143 from their federal taxes and up to $921 on their state income taxes.
With more than 222,000 Iowans benefiting, Iowa’s Earned Income Tax Credit (EITC) is designed to help lower income families while initiating work. As a family earns more income, they become eligible for a larger EITC until they approach self-sufficiency.
A single filer without dependents could receive as much as $496 and a family of five with an income of under $47,000 could receive up to $6,143.
According to the Internal Revenue Service, about 25% of eligible workers don’t claim the credit. For more information or assistance on the EITC, call 1-800-829-8482 to find your local tax assistance site or log on to www.irs.gov.
Other Iowa Tax Credits
- Last year the legislature passed a bill that doubles the tax credit available to volunteer firefighters and emergency medical technicians (EMTs). The credit was increased from $50 annually to $100.
- The Iowa Child and Dependent Care Tax Credit is a refundable tax credit available to anyone that had child care expenses in the last year, such as paying someone to care for a child, earned income from wages, salaries, or similar compensation. The change will return over $4.5 million to middle-class Iowans with child care expenses every year.
- In 2014, the legislature created an adoption tax credit. The credit would provide up to $2,500 to any Iowa taxpayer to help offset the costs of qualified adoption expenses, including welfare agency and legal fees, fees and costs relating to adopting the child, and medical and hospital expenses of the mother for birth of the adopted child.
Free Tax Services
A public-private partnership, the Free File Alliance and the IRS are offering middle-class families with incomes below $60,000 a fast, free and safe way to do their taxes online.
To learn more visit, www.IRS.gov/FreeFile.