Working Families Reap New Tax Benefits

Some people think Halloween comes on April 15 — the day income tax forms are due — when there are more tricks than treats. But this year might be a bit less ghastly, thanks to some new tax credits for working families.

One of the most important is the Earned Income Tax Credit (EITC) which was modified for 1997. Eligible for credits are one-child families with adjusted gross income of up to $25,760 ($29,290 for families with more than one child, and $9,777 for childless adults).

The average credit in 1996 for all recipients was $1,395. (Figures for 1997 are not yet available.)

Qualifying children can include a son or daughter, adopted child, grandchild, stepchild or foster child who was under 19 years old, or under 24 years old and a full-time student, or any person who is permanently and totally disabled. The child, furthermore, does not have to be a dependent in most cases, according to the IRS. The credit is subtracted from the amount of tax you owe, so you end up paying less tax or may even get a refund.

You can file for the EITC on Form 1040, 1040A or Form 1040-EZ. A second option, called the Advance EITC, allows you to get payments throughout the year. You must have a child to get the Advance EITC payments.

For more information, call the IRS at 1 (800) 829-3676 and ask for Publication 596.