EITC Receivers get Extra Credit

January 29, 2009 // 0 Comments

by JERRY COON Incredibly enough, our Michigan legislature is giving a credit on this year’s tax return that it can ill afford. Michigan’s tax revenues are decreasing by the minute and in approximately the same proportion that the unemployment rate is increasing. However, they have still found it in their hearts to give out a very large tax break. Starting this year, all taxpayers receiving a federal Earned Income Tax Credit (EITC) are going to also receive a refundable credit on their Michigan tax return equal to 10% of the federal EITC. I didn’t realize the Treasury had several millions of dollars in a rainy day fund in Lansing just waiting to be refunded as tax returns are filed. In fact, if what they are telling us is true, they don’t have several millions of dollars in any fund anywhere. The reality of the situation is that this refunded money is most likely going to cause some other program to be shorted. I’m doing a little complaining here because I’m afraid our schools might just be the ones that could get shorted, and that is just not right. In any event, the rules are the rules and I will get off my soap box. This particular rule says taxpayers who receive a federal EITC will receive an additional 10% credit on their Michigan tax return. So be it. In that light, what I really need to discuss, then, is how someone qualifies for the federal EITC. There are three sets of requirements. The first set of requirements applies to all taxpayers who wish to claim the EITC. The second set applies to taxpayers who do not have qualifying children. The third set applies to taxpayers with qualifying children. The requirements that apply to all taxpayers are as follows. The first and most important requirement is the taxpayers must have earned income. For those filing single, head of household, or as a qualifying widower with no qualifying dependents, the income range (IR) to receive a credit ranges from $1 up to $12,880. For those with one dependent, the IR is from $1 up to $33.995. For those with two or more dependents, the IR is from $1 up to $39,646. For taxpayers who file using the […]

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