The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

Last year, more than 21 million taxpayers collected more than $36 billion in EITC payments. If you want to claim the EITC you should make sure you are eligible for the credit before sending in your tax return. Don't guess. Know if you are qualified!

To learn if you qualify, Goto

Year Round Tax Tips

- Education If practical, take an accounting class. Over the long term, the investment is worth the return.

- Set up a system File and note tax-relevant information every week or at least once per month throughout the entire year. For example, attach receipts to corresponding cancelled checks or copies of checks, and file them in the category-specific file.

- Reconcile Bank Statements As they arrive in the mail, reconcile bank statements with checks and receipts. File returned checks in numerical order.

- Keep Your Records Current Using one of the established check-ledger computer programs, or even an "old-fashioned" hand-written ledger book, ensure that you keep records up-to-date. The ability to print and export reports in several different formats may also prove helpful.

- Carefully Prepare Your Tax Information When preparing a tax return, double check and make sure you have the checks, credit card receipts and other information necessary to verify every entry in your system. Make sure that there are no double entries. And be particularly careful about cash and meal receipts.