Free Tax Filing for Qualified Texans

2010 federal income tax filing deadline, is just around the corner. For Texans trying to wade through their federal income tax return, it can often be challenging. Fortunately, the Internal Revenue Service (IRS) and the Texas Workforce Commission (TWC) stand ready to assist taxpayers with information on preparations services.

A new service offered this year is Free File, a free, federal income tax preparation and electronic filing program for eligible taxpayers. Taxpayers with a 2010 Adjusted Gross Income of $58,000 or less who meet additional requirements can qualify for Free File. For more information on the program visit IRS.gov.

TWC also is encouraging qualifying taxpayers to take advantage of the Earned Income Tax Credit (EITC), which allows lower-income individuals and families to pay less or no federal income tax, or receive cash payments. Local Workforce Solutions Offices offer tax preparation help, including how to file for EITC. For more information on specific services provided by Local Workforce Boards in your area, please visit www.texasworkforce.org.

The IRS estimates that in 2009 more than 2.6 million Texans claimed more than $6.5 billion in EITC credits, with an average refund of $2,492. In recent years, Texas has ranked first in the nation in the number of EITC dollars claimed by taxpayers. Despite the credit’s availability, however, the IRS estimates that as many as 20 to 25 percent of Americans who qualify for the credit do not claim it on their tax returns.

Under certain limitations for 2010, individuals may qualify if their adjusted gross income is less than:

• $43,352 ($48,362 married filing jointly) with three or more qualifying children
• $40,363 ($45,373 married filing jointly) with two qualifying children
• $35,535 ($40,545 married filing jointly) with one qualifying child
• $13,460 ($18,470 married filing jointly) with no qualifying children
The maximum credit for 2010 is as follows:
• $5,666 with three or more qualifying children
• $5,036 with two qualifying children
• $3,050 with one qualifying child
• $457 with no qualifying children

Investment income must be less than $3,100 for the year to qualify for EITC.

EITC does not affect an individual’s eligibility to receive certain public assistance benefits. In most cases, the credit 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.