FAMILY INDEPENDENCE ADMINISTRATION Seth W. Diamond ...onlineresources.wnylc.net/nychra/docs/_07-01-eli.pdf · IRS Form W-5: Earned Income Credit Advance Payment Certificate, and submit

FAMILY INDEPENDENCE ADMINISTRATION Seth W Diamond Executive Deputy Commissioner

HAVE QUESTIONS ABOUT THIS PROCEDURE

Call 718-557-1313 then press 2 at the prompt followed by 765 or

James K Whelan Deputy Commissioner Lisa C Fitzpatrick Assistant Deputy Commissioner Policy Procedures and Training Office of Procedures

POLICY DIRECTIVE 07-01-ELI

(This Policy Directive Replaces Policy Bulletin 05-142-OPE and PD 06-11-ELI)

EARNED INCOME TAX CREDIT (EITC) AND OTHER TAX CREDITS FOR TAX YEAR 2006

Date

January 26 2007

Subtopic(s) Budgeting

AUDIENCE The information in this policy directive is for staff in all Job Centers and Non-Public Assistance (NPA) Food Stamp (FS) Offices It is informational for all other staff

POLICY The Internal Revenue Service (IRS) New York State (NYS) and New

York City (NYC) provide Federal State and City tax credits respectively to individuals and families with low or moderate income

BACKGROUND There are several types of tax credits available to individuals and

families with low or moderate income The credits are an important antipoverty tool that can dramatically increase income These credits are the

bull Federal EITC New York State EITC and New York City EITC bull Child Tax Credit bull Child and Dependent Care Credit bull Household Credit bull Education Credits bull Credit for Federal Telephone Excise Tax

Federal EITC NYS EITC and NYC EITC

Individuals who qualify for the EITC and file Federal and State tax returns can receive benefits totaling more than $6100 in combined Federal NYS and NYC EITC For example a single parent earning up to $36348 and raising more that one child in hisher home may be eligible to receive up to $6122 in EITC

send an e-mail to FIA Call Center

Distribution X

PD 07-01-ELI

NYC full- and part-year residents who claimed the Federal EITC may now claim a NYC EITC They must file (or have filed) a New York State income tax return to claim the NYC EITC This credit is in addition to the New York State EITC

For tax year 2006 the NYC EITC is equal to five percent of the

allowable Federal EITC (For part-year residents the amount of the credit is subject to proration)

The maximum EITCs for tax year 2006 are

Two or more children

$4536 (Federal) + $1360 (State) + $226 (City) = $6122

One child

$2747 (Federal) + $824 (State) + $137 (City) = $3708

No children

$412 (Federal) + $123 (State) + $20 (City) = $555

The qualifying income limits for the EITCs have increased as follows Two or more qualifying children

$36348 (or $38348 if married filing jointly)

One qualifying child

$32001 (or $34001 if married filing jointly)

No qualifying children

$12120 (or $14120 if married filing jointly)

Federal EITC Payment Options

There are two ways to receive the Federal EITC

bull Federal EITC Advance Payment bull Lump-Sum Year-End EITC

Federal EITC Advance Payment

The Federal EITC Advance Payment option allows some wage earners who are raising one or more children to get part of their Federal EITC in their paychecks throughout the year and part in a check from the IRS after they file their Federal tax return To apply for the Federal EITC Advance applicantsparticipants must complete IRS Form W-5 Earned Income Credit Advance Payment Certificate and submit it to their employer Form W-5 must be submitted each year to continue receiving the Federal EITC Advance Payment

Federal Lump-Sum Year-End EITC

The Federal EITC may be claimed when annual tax returns are submitted at the end of the year It is important to note that in order to claim the EITC an income tax return must be filed even if no taxes are owed

FIA Policy Procedures and Training 2 Office of Procedures

PD 07-01-ELI

NYS and NYC Lump-Sum Year-End EITC

The NYS EITC and NYC EITC may only be received by filing a NYS tax return at the end of the year and claiming the State EITC and NYC EITC There is no Advance Payment option for the State EITC or NYC EITC

Retroactive EITC An applicantparticipant may be eligible for retroactive EITC up to

three years prior to the current tax year This applies to Federal State and NYC EITC In order to request retroactive Federal State or NYC EITC an income tax return must have been filed for the year(s) the applicantparticipant is requesting the retroactive credit If returns were not filed it is necessary to file an income tax return for the year(s) and submit them along with the request for retroactive EITC Since the amounts of the NYS EITC and NYC EITC are based on the Federal credit the applicantparticipant need only complete and submit State Form IT-215 Claim for Earned Income Credit along with a copy of the prior year(s) NYS income tax return(s) To obtain transcripts of prior year NYS tax returns and State Form IT-215 the applicantparticipant should call the NYS Department of Taxation and Finance at (800) 462-8100

For further information on retroactive eligibility the applicantparticipant should call the IRS at (800) 829-1040 for Federal EITC and the NYS Department of Taxation and Finance at (800) 462-8100 for NYS EITC or NYC EITC

Penalty for Fraudulent or Improper EITC Claims

An improper claim resulting from reckless or intentional disregard of IRS rules and regulations may cause a denial of future EITC for two years fraudulent claims may result in not being allowed to file for EITC for the next 10 years

Child Tax Credit The Child Tax Credit worth up to $1000 for each qualifying child is

a nonrefundable credit used to reduce the amount of tax owed and may be claimed on the individualrsquos Federal tax return However if the child tax credit exceeds the amount of tax owed the taxpayer may claim the difference as an Additional Child Tax Credit which is a refundable credit and may be claimed by filing Federal Form 8812 Additional Child Tax Credit with hisher Federal taxes

FIA Policy Procedures and Training 3 Office of Procedures

PD 07-01-ELI

Child and Dependent Care Credit

Individuals who pay for child care so they can work or look for work may be able to claim some of these expenses as a credit on their Federal and State tax returns Individuals must first qualify for the Federal credit before claiming the refundable State credit The Federal credit may be claimed on the individualrsquos Federal tax return while the State credit may be claimed by filing State Form IT-216 Claim for Child and Dependent Care Credit

Household Credit

A Household Credit of up to $75 plus up to $15 for each Federal exemption claimed is available to individuals who are married a head of household or a qualifying widowwidower with a dependent child whose income is $32000 or less and who cannot be claimed as a dependent on another personrsquos Federal return Single filers with incomes up to $28000 can also qualify NYC residents are eligible for an additional New York City Household Credit These credits may be claimed directly on the NYS tax return

Education Credits

There are two Federal education credits that may be claimed for each eligible student by completing Federal Form 8863 Education Credits (Hope and Lifetime Learning Credits)

bull Hope Credit This credit applies to the first two taxable years

of postsecondary education $1650 is the maximum credit per student that may be claimed

bull Lifetime Learning Credit This credit is based on the total of qualified education expenses The maximum credit is $2000 per year

In addition a college tuition credit of up to $400 is available to an eligible full-year resident of New York State if she paid qualified college tuition expenses to an institution of higher education on behalf of an eligible student Alternatively a New York college tuition itemized deduction may be claimed This credit or deduction may be claimed on State Form IT-272 Claim for College Tuition Credit or Itemized Deduction

Credit for Federal Telephone Excise Tax

The Credit for Federal Telephone Excise Tax may be claimed on a new line on the 2006 Federal income tax return Individuals not required to file an individual income tax return may claim the refund on a new short form IRS Form 1040EZ-T Request for Refund of Federal Telephone Excise Tax The refund amount is $30 for one Federal exemption $40 for two $50 for three and $60 for four or more

FIA Policy Procedures and Training 4 Office of Procedures

PD 07-01-ELI

REQUIRED ACTION

Workers at Job Centers and NPA FS Offices must inform all potentially eligible applicantsparticipants about the availability of these tax credits and advise them to seek further information and guidance by utilizing the free tax assistance centers provided in various locations in all five boroughs as well as the following resources bull Internal Revenue ServiceVolunteer Income Tax Assistance

(VITA) at (800) 829-1040 bull New York State Taxpayer Information at (800) 225-5829 bull Department of Consumer Affairs at (212) 487-4444 bull New York City 311 Citizen Service Hotline at 311

In addition the Department of Consumer Affairs (DCA) EITC brochure ldquoEITC Itrsquos Your Money Come and Get Itrdquo (Attachment A) and the VITA Site Information Directory (W-274BB) must be given to applicantsparticipants during any applicantparticipant contact The brochure provides information on the tax benefits of the EITC the directory contains a listing of VITA sites throughout New York City The DCA EITC brochure will be sent to Job Centers and NPA FS Offices under separate cover

PROGRAM IMPLICATIONS

Model Office Implications

There are no Model Office implications

There are no POS implications

Paperless Office System (POS) Implications Food Stamp Implications

Federal and State EITC are excluded as income in the month they are received and as a resource as long as the EITC amount remains identifiable

Public Assistance Implications

Federal and State EITC are excluded as income in the month they are received and as a resource as long as the EITC amount remains identifiable

Medicaid Implications

EITC is not counted as income for Medicaid and is not counted as a resource for Medicaid in the month the EITC payment is received or in the following month

FIA Policy Procedures and Training 5 Office of Procedures

PD 07-01-ELI

LIMITED ENGLISH SPEAKING ABILITY (LESA) AND HEARING IMPAIRED IMPLICATIONS

For Limited English Speaking Ability (LESA) applicantsparticipants make sure to obtain appropriate interpreter services in accordance with PD 06-12-OPE For hearing-impaired applicantsparticipants make sure to obtain appropriate interpreter services in accordance with PD 06-13-OPE

There are no Fair Hearing implications

FAIR HEARING IMPLICATIONS RELATED ITEMS CD 07-02 REFERENCES

06-INF-36

ATTACHMENTS

Attachment A EITC Itrsquos Your Money Come And Get It W-274BB VITA Site Information Directory

Please use Print on Demand to obtain copies of forms

W-274BB (S) VITA Site Information Directory (Spanish)

FIA Policy Procedures and Training 6 Office of Procedures

The government might owe YOU thousands of dollars at tax time If you earn less than $38000 you may qualify for the Earned Income Tax Credit (EITC)

Dial 311 or visit wwwnycgoveitc to learn where you can file your taxes for FREEIn some cases sites will help you claim important benefits besides the EITC

El gobierno podriacutea estar DEBIEacuteNDOLE miles de doacutelares al momento de declarar sus impuestos Si gana menos de $38000 usted podriacutea calificar para el Creacutedito de Impuesto por Ingreso Ganado (EITC)

Marque 311 para que se informe sobre doacutende puede preparar su declaracioacuten de impuestos GRATISEn algunos casos los sitios podriacutean ayudarle a reclamar importantes beneficios aparte del EITC

EITC ITrsquoS YOUR MONEY

COME AND GET ITEITC ES SU DINERO iexclVENGA A BUSCARLO

Michael R BloombergMayor

Photo Credit Ilona Lieberman

Jonathan MintzCommissioner

SpanishEnglish

TAX CREDIT

CREacuteDITO DEIMPUESTO

Attachment A

wwwnycgoveitc

Earned Income Tax Credit (EITC) Frequently Asked Questions Spanish

The government owes ME money The Earned Income Tax Credit (EITC) is a federal state and New York City refundable tax credit for qualifying working families and individuals So even though you donrsquot owe the government if you qualify THE GOVERNMENT OWES YOU

So do I qualify Regardless of whether your income is from full-time part-time or self-employment work you likely qualify ifbull You have dependent children and your household income is less than $38000bull You are age 25 through 64 have no children and earn less than $14000

How much money can I get back Up to $6000 The average combined EITC credit is more than $2500mdashand you can file for three years back if you didnrsquot claim the EITC before

How do I get my money Just file your taxes and claim the EITC And claiming the EITC will usually not affect your eligibility for other benefits like food stamps housing vouchers public assistance Supplemental Security Income (SSI) and Medicaid

And someone will do my taxes for FREE Yes Simply Dial 311 to learn where NYC EITC Coalition partners will prepare taxes for free for qualifying New Yorkers at locations in every borough

How can I get my refund quickly If you have a bank account and file electronically you can arrange for direct deposit of your refund in as little as10 business days If you donrsquot have a bank account yet visit wwwnycgoveitc to learn about opening a low or no-fee account at a bank or credit union in your area

iquestEl gobierno me debe dinero El Creacutedito de Impuesto por Ingreso Ganado (EITC) es un creacutedito federal estatal y de la Ciudad de Nueva York que es reembolsable para las personas y las familias trabajadoras que califican Asiacute que auacuten si no le bebe al gobierno si califica iexclEL GOBIERNO LE DEBE A USTED

Entonces iquestcalifico Aunque su ingreso provenga de un trabajo de tiempo completo de tiempo parcial o de su autoempleo es posible que usted califique sibull Usted tiene hijos dependientes y el ingreso de su hogar es menos de $38000bull Su edad estaacute entre 25 hasta 64 antildeos no tiene hijos y gana menos de $14000

iquestCuaacutento dinero puedo recibir iexclHasta $6000 El promedio del creacutedito combinado del EITC es de maacutes de $2500mdashy usted puede solicitar por los tres antildeos previos si no reclamoacute el EITC antes

iquestCoacutemo reclamo mi dinero Simplemente declare sus impuestos y reclame el EITC Reclamar el EITC usualmente no afectaraacute su elegibilidad para recibir otros beneficios como cupones de comida o vales de vivienda asistencia puacuteblica ingreso suplementario del seguro social (SSI) y Medicaid

iquestY alguien puede preparar mis impuestos GRATIS Siacute Simplemente Marque 311 para que se informe sobre doacutende los socios de la Coalicioacuten NYC EITC preparan las declaraciones de impuestos gratis a los neoyorquinos que califican en todos los condados

iquestCoacutemo puedo recibir mi reembolso raacutepidamente Si tiene una cuenta de banco y declara sus impuestos electroacutenicamente usted puede gestionar un depoacutesito directo para recibir su reembolso en tan solo 10 diacuteas laborables Si usted no tiene una cuenta de banco todaviacutea visite la paacutegina wwwnycgoveitc para que aprenda coacutemo abrir una cuenta con tarifa baja o sin tarifa en un banco o unioacuten de creacutedito en su zona

AARP ACORN ACTORS EQUITY AFSCME DISTRICT COUNCIL 1707 ALIANZA DOMINICANA ALPFA ARTHUR ASHE HEALTH SCIENCE ACADEMY ASTORIA FEDERAL SAVINGS BANK ATLANTIC DISTRICT OF THE LUTHERAN CHURCH MISSOURI SYNOD BAILEY HOUSE INC BANK OF AMERICA BANK OF EAST ASIA BARUCH COLLEGE BEDFORD-STUYVESANT COMMUNITY LEGAL SERVICES CORPORATION BEGINNING WITH CHILDREN BENEVOLENT TAX PROFESSIONAL SERVICES INC BENJAMIN CARDOZO SCHOOL OF LAW BETHEX FEDERAL CREDIT UNION BMS FAMILY HEALTH CENTER BROOKLYN COOPERATIVE FEDERAL CREDIT UNION BROOKLYN PUBLIC LIBRARY BROOKLYN VIEW BUSHWICK OBSERVER CAMBA CANARSIE COURIER CATHAY BANK CATHOLIC CHARITIES OF THE DIOCESE OF BROOKLYN AND QUEENS CATHOLIC HOME BUREAU CBS OUTDOOR CHILDRENS DEFENSE FUND-NEW YORK CHINATRUST BANK (USA) CITIZENS FOR NYC CITY UNIVERSITY OF NEW YORK COJO-FLATBUSH COMMERCE BANK COMMUNITY TAX AID THE COUNCIL OF CHURCHES OF THE CITY OF NEW YORK COUNTRY BANK C-TOWN SUPERMARKET DELOITTE DIME SAVINGS BANK OF WILLIAMSBURG DISTRICT COUNCIL 37 AFSCME AFL-CIO EAST HARLEM CHAMBER OF COMMERCE EDUCATIONAL ALLIANCE FEDERATION OF PROTESTANT WELFARE AGENCIES FORDHAM UNIVERSITY SCHOOL OF LAW GO DIRECT GOODWILL INDUSTRIES-QUEENS (ESP) GROUP HEALTH INCORPORATED HARLEM CONGREGATIONS FOR COMMUNITY IMPROVEMENT HISPANICS ACROSS AMERICA HUNTER COLLEGE INTERNAL REVENUE SERVICE INWOOD HOUSE KRASDALE FOODS LEAGUE OF MUTUAL TAXI OWNERS FEDERAL CREDIT UNION LEGAL AID SOCIETY LEGAL AID SOCIETY-HARLEM COMMUNITY LAW OFFICE LEGAL INFORMATION FOR FAMILIES TODAY LEGAL SERVICES FOR NEW YORK CITY LEGAL SERVICES FOR NEW YORK CITY-BRONX LOW INCOME TAXPAYER CLINIC LOWER EAST SIDE PEOPLES FEDERAL CREDIT UNION LOWER EAST SIDE VOICE MANHATTAN LEGAL SERVICES-EARNED INCOME TAX UNIT METROPOLITAN COUNCIL ON JEWISH POVERTY MUNICIPAL CREDIT UNION MUSLIM WOMENS INSTITUTE FOR RESEARCH amp DEVELOPMENT NATIONAL FEDERATION OF COMMUNITY DEVELOPMENT CREDIT UNIONS NEIGHBORHOOD TRUST FEDERAL CREDIT UNION NEW YORK CHRISTIAN TIMES NEW YORK CITY BAR ASSOCIATION NEW YORK CITY CENTRAL LABOR COUNCIL NEW YORK CITY COALITION AGAINST HUNGER NEW YORK CITY COUNCIL NEW YORK CITY HOUSING AUTHORITY NEW YORK COMMUNITY BANK NEW YORK LANGUAGE CENTER NEW YORK LAW SCHOOL NEW YORK PUBLIC LIBRARY NEW YORK STATE BANKING DEPARTMENT NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE NEW YORK UNIVERSITY-STERN SCHOOL NYCFNAC OCEAN BAY COMMUNITY DEVELOPMENT CORPORATION ONE ECONOMY PACE UNIVERSITY POLISH amp SLAVIC FEDERAL CREDIT UNION PROFESSIONAL STAFF CONGRESS QUEENS LEGAL SERVICES-JAMAICA QUEENS LEGAL SERVICES-LONG ISLAND CITY QUEENS PUBLIC LIBRARY ROCHDALE VILLAGE BULLETIN RSVPCOMMUNITY SERVICE SOCIETY SCHOOL SETTLEMENT OF WILLIAMSBURG SEEDCO SOUTH BROOKLYN LEGAL SERVICES ST NICKS-EWVIDCO ST JOHNS UNIVERSITY UNION SETTLEMENT FEDERAL CREDIT UNION UNITED BRONX PARENTS INC UNITED FEDERATION OF TEACHERS UNITED JEWISH ORGANIZATIONS OF WILLIAMSBURG UNITED NEIGHBORHOOD HOUSES UNITED STATES POSTAL SERVICE VICTORY STATE BANK WASHINGTON MUTUAL WEST BRONX HOUSING AND NEIGHBORHOOD RESOURCE CENTER WILDCAT SERVICE CORPORATION WILLIAM J CLINTON FOUNDATION WOMENS CENTER FOR EDUCATION AND CAREER ADVANCEMENT WOODYCREST CENTER FOR HUMAN DEVELOPMENT WORLD HUNGER YEAR YMCA OF GREATER NEW YORK

Attachment A

SPONSORED BY THE NYC EITC COALITION

Michael R BloombergMayor

Jonathan MintzCommissioner

Coordinated by the Department of Consumer Affairs the EITC Campaign is part of Mayor Bloombergrsquos historic public-private initiative to reduce poverty in New York City

Coordinado por el Departamento de Asuntos del Consumidor de la ciudad de Nueva York la campantildea EITC es parte deuna iniciativa histoacuterica puacuteblica y privada del Alcalde Bloomberg para reducir la pobreza en la ciudad de Nueva York

Attachment A

SITE NAME SITE ADDRESS OPENING AND CLOSING DATES HOURS OPEN INCOME LIMITS

OTHER LANGUAGES AVAILABLE

PHONE NUMBER HANDICAPPED ACCESSIBLE

New York University

40 West 4th Street (Tisch Hall) at Greene Street New York NY 10012-1106

January 30ndashApril 11 MonndashTues 11 AMndash6 PM

Accepting clients who make $40000 with children and under $20000 without children

(917) 657-5029 Yes

Alianza Dominicana

2410 Amsterdam Avenue 1st Fl New York NY 10033-7320

Opening date January 25 Closing date not available

MonndashThurs 9 AMndash630 PM Sat 9 AMndash12 PM

Accepting clients who make $40000 with children and under $20000 without children

Spanish (212) 740-1960 Yes

Food Change ndash Food amp Finance Center

248 Saint Nicholas Ave (bet 124th and 125th Streets) New York NY 10027-4840

January 18ndashApril 18 MonndashThurs 9 AMndash7 PM FrindashSat 9 AMndash5 PM Sun 12 PMndash4 PM

Accepting clients who make $40000 with children and under $20000 without children

None available No

Food Change ndash 1199 SEIU NBF

330 West 42nd Street 9th Fl (bet 8th and 9th Avenues) New York NY 10036-6902

January 23ndashApril 18 MonndashThurs 4 PMndash7 PM Sat 10 AMndash4 PM

Accepting clients who make $40000 with children and under $20000 without children

Spanish Chinese

None available Yes

Food Change ndash Northern Manhattan Improvement Corporation

76 Wadsworth Ave 2nd Fl (bet 176th and 177th Streets) New York NY 10033-7049

January 23ndashApril 18 MonndashThurs 12 PMndash7 PM Fri 12 PMndash4 PM Sat 9 AMndash5 PM

Accepting clients who make $40000 with children and under $20000 without children

Spanish None available Yes

NYC f NAC ndash Union Settlement Credit Union

237 East 104th Street (bet 2nd and 3rd Avenues) New York NY 10029-5404

January 17ndashApril 14 TuesndashThurs 430 PMndash8 PM Sat 10 AMndash4 PM Special Mons 123 130 26 43 and 410 430 PMndash8 PM

Accepting clients who make $40000 with children and under $20000 without children

(212) 828-6060 Yes

Form W-274BB (page 1) 12607

VITA SITE INFORMATION DIRECTORY FREE TAX PREPARATION

JANUARYndashAPRIL 2007

T h e C I T Y o f N E W Y O R K H u m a n R e s o u r c e s A d m i n i s t r a t i o n F a m i l y I n d e p e n d e n c e A d m i n i s t r a t i o n