Earned Income Credit

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Employment Taxes – Corp or LLC
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Earned Income Credit

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EARNED INCOME CREDIT FOR THE WORKING POOR

An Article by William A. Taylor (The Business Lawyer)

The federal government is now in the business of giving away money:

  • A bail-out of $700 billion to Wall Street banks and other needy companies – and more money in the near future if needed;
  • tax breaks for the rich and for small businesses – awarded as part of the bail-out to get senators and congresspersons to vote for the $700 billion;
  • $10 billion per month in Iraq;
  • $25 billion to the Big Three of the U. S. auto industry;
  • $4 billion to Exxon Mobil (according to vice presidential candidate Joe Biden slamming John McCain);
  • $1,800 per family in Bush’s Economic Stimulus Tax Rebate.

Why should the poor be left out?

They aren’t; there is the Earned Income Credit. It has been on the books for years. It was designed to get money to the working poor. The only problem is that the working poor don’t know how to get the money. This article will explain how to get it so YOU can explain it to someone you know who could benefit from the federal government’s current desire to give away money.

For tax year 2007, the maximum amount to be received ($4,400) will be sent to a family with two (or more) children if the breadwinner(s) earn no more than $16,400 per year.

Example: 52 year old grandmother raising her two grade school grandchildren on a part time work income of $16,400 a year earned as a WalMart greeter.

She should be informed about the Earned Income Credit and she should be encouraged to fill out (or have someone fill out for her) an Earned Income Credit IRS form to receive her $4,400 check. Even if the breadwinner(s) don’t have to pay income tax and don’t normally file income tax returns, they can qualify for this Earned Income Credit.

People in congress are walking around bragging about having taken care of the working poor, in order to justify the tax breaks they gave to the idle rich and the corporations. You might as well take advantage of the crumbs they tossed on the table since they were tossed there on purpose.

Not everyone is eligible for the maximum $4,400. The minimum to be received (one dollar – $1.00) would be payable to the breadwinner(s) earning in 2007 the maximum allowable amount ($37,263).

The amount to be received ($4,400 or $1.00) varies depending on:

  • the number of children (2 or more, one or none) where the more children the more money the family can earn and still be eligible;
  • if the qualifying children lived with the family for at least half the year;
  • the age of the children – age 18 the maximum – unless the child is in college (then age 24 is the maximum) unless the child is disabled at any age;
  • if the children are claimed on any one else’s tax return.

Once you cut through all of the tax talk, the outline of possibly eligible people emerge. Even if the breadwinner has already filed 2007’s income tax return, that person can apply for the Earned Income Credit. This credit is designed for “the working poor,” people who have jobs that don’t pay a living wage but who do have children they are raising and can declare on their income tax forms.

This credit is aimed at people you know. They just need to be informed and encouraged to apply. Then they too can feel like they participated in the federal government’s socialistic intervention in the American capitalist economy. They too can say that they got bailed out.

And the good thing is – they can qualify for the Earned Income Credit every year that they remain working and poor.

ABOUT THE AUTHOR: William A. Taylor, attorney at law, does business as “THE BUSINESS LAWYERS.” He can be reached at (510) 893-9465

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