The Earned Income Tax Credit is a boost for Mainers and our economy
AUGUSTA, Maine — Workers with low incomes could receive up to $6,885 because of the EITC, or Earned Income Tax Credit. But that income boost is only available to those who file their taxes.
The EITC is a commonsense tax break for working people with low incomes. It encourages and rewards work by providing eligible filers a credit that gets larger the more they earn. Eligible filers claim the EITC on their federal tax returns. Maine also offers a smaller EITC on state tax returns.
According to IRS data, 95,000 Mainers working in 2018 claimed a total of $199 million in federal EITC last year. The average credit was $2,106 per tax filer. This state refundable credit boosts Maine incomes by an additional $10 million and will provide an average benefit of about $105 for eligible Mainers.
“The EITC is one of the best anti-poverty programs ever created in our country. It helps Mainers buy groceries, pay bills and cover other basic living expenses, with the benefits rippling throughout our economy. Mainers with low incomes who worked last year should file their taxes to make sure they get credit for their hard work,” said Sarah Austin, a policy analyst specializing in taxes and budget at the Maine Center for Economic Policy.
Mainers who worked last year and earned less than $56,000 may be eligible for the federal EITC. Eligible filers could receive a credit worth up to $6,557 on the federal tax return, though the value of the credit varies based on income and by whether the filer has children, and how many. Because the credit is refundable, it can lead to larger refunds – even if the filer has no tax obligation.
Maine also offers an EITC on filers’ state income taxes. For income earned in 2019, Maine’s EITC is worth 5 percent of the tax filer’s federal credit. Households who receive the maximum federal EITC would receive a $328 credit on their Maine income tax filing.
While millions of Americans and tens of thousands of Mainers benefited from the EITC, many others left money on the table because they didn’t file their taxes. The IRS estimates that one-fifth of eligible Mainers don’t receive the EITC they earned by working. That leaves tens of millions of dollars unclaimed by low-income workers.
Mainers who earned less than $56,000 in 2019 can get free tax filing assistance by IRS trained and certified volunteers at one of CA$H Maine’s 35 tax sites. In 2018, CA$H Maine saved Mainers more than $566,000 in tax filing fees, and helped Mainers claim more than $1.51 million in Earned Income Tax Credits.
For more information on CA$H Maine’s free tax filing assistance program, or for a list of CA$H Coalition locations, visit https://www.cashmaine.org/free-tax-prep/.