Many low- and moderate-income working families in Wisconsin may qualify for thousands of dollars in tax credits. The federal Earned Income Tax Credit and the state Earned Income Credit can provide anywhere from a few dollars to more than $8,000 for the household, depending on household income, marital status and number of children.
These tax credits are designed for households with earnings and can be a vital source of supplemental income. Workers can receive the credits even if their incomes are too low to pay any income taxes.
To qualify for the EITC, individuals need to have earned some work income during 2015. The specific income limits depend on marital status and number of children in the household. For example, for unmarried households with children, the income limits range from $39,131 for one child to $47,747 for three or more children. Limits are several thousand dollars more for married households.
The federal EITC ranges from a few dollars to more than $6,000. The Wisconsin credit can be as high as $2,122 and is available to any household with children that qualifies for the federal credit. The highest credits are available to households with three or more children. Credit amounts also vary with income.
Every year, thousands of eligible families miss out by not filing a return. People who may not have been eligible in the past are more likely to miss out, as are non-English speakers, people with changes in household circumstances, and those whose income is too low to otherwise have to file tax returns. People new to Wisconsin may not be familiar with the state EIC, as it is not available in all states.
Filing a Wisconsin tax return also allows people to claim the state Homestead Credit. This credit is intended to offset the impact of rent and property taxes on low- and moderate-income households. It is available to renters and homeowners with incomes up to $24,680, and can be worth as much as $1,168.
To help eligible households learn about these tax credits, UW-Extension has developed a website providing detailed information—including information on eligibility and benefits, links to tax forms, links to find free tax assistance, and more. The website, which can be found at http://fyi.uwex.edu/eitc/, also provides resources for groups interested in helping to get the word out about the tax credits.