Earned Income Tax Credit (EITC)

Most Confusing Parts Of The Income Tax Code, Part 5: Earned Income Tax Credits

Many provisions of the Internal Revenue Code are complicated. Proper interpretation of the rules and regulations contained in these provisions requires the assistance of an experienced and knowledgeable tax professional. The fifth part of the series about the most confusing provisions of the Internal Revenue Code addresses earned income tax credits.

Why Is It Confusing?

  • Complicated definitions and rules
  • Multitudes of required calculations

In 2004, Congress made this credit for low-income taxpayers slightly less confusing by adopting a uniform definition of a qualifying child. But even the tests (relationship, age, residency, and joint return) to be a qualifying child under the EITC may be confusing and cumbersome for many taxpayers.

Reminder: Employers Face New Jan. 31 W-2 Filing Deadline

REMINDER: Employers and small businesses have a new deadline, January 31, 2017, for filing Forms W-2. The acceleration of this deadline is the result of a new federal law aimed at helping the IRS detect and prevent refund fraud. For similar reasons, the new law also requires the IRS to hold refunds involving two key refundable tax credits until at least February 15, 2017. The January 31 deadline of past years for employers furnishing copies of Forms W-2 to their employees remains the same.

Federal Tax Refunds May Be Delayed In 2017

Earlier this year, the Internal Revenue Service announced it is beginning protocols for processing tax returns using the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC). The IRS is sharing this information to help taxpayers, tax preparers, and other tax professionals prepare for the opening weeks of the 2017 filing season. The IRS is attempting to ensure taxpayers receive a correct and accurate refund.

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted in December of 2015, which made several changes to the tax law affecting taxpayers with families. This change begins Jan. 1, 2017, and therefore may affect some returns filed early in 2017.

Tax Benefits For Disabled Taxpayers

The tax professionals at the Thorgood Law Firm can help any taxpayer pinpoint all of the tax benefits that are applicable to his or her situation or status. The following are some of the tax benefits that may assist disabled taxpayers.

  1. Credit for the Elderly or Disabled: This credit is generally available to certain taxpayers who are sixty-five (65) and older as well as to certain disabled taxpayers who are younger than sixty-five (65) but are on permanent and total disability.

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