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12/20/12

Summary:

  • Describes how a client can get an EITC payment.
  • Instructs staff on how to budget EITC payments.
  • Announces Client Notices that will be sent to clients telling them about the EITC payment.

  1. State Earned Income Tax Credit
  2. Client Action
    1. Family Community Resource Center (FCRC) Action
  3. Free Tax Counseling and Preparation
  4. Forms referenced:

Tell all clients about Earned Income Tax Credit (EITC) Payments. Urge employed clients to raise their income by filing for both the federal and state EITC. Any income that working clients can receive through the EITC is beneficial to them and helps them move toward self-sufficiency. The EITC is another benefit clients can get by working.

For cash and medical cases, CN 12.37, THE 2012 TAX SEASON IS HERE (pdf), and CN 12.38, FREE TAX HELP (pdf), will be inserted with the January 2013 medical cards.

SNAP only clients in Category 08 cases and in Category 91, 92, 93, 94, and 96 cases with unmet spenddown will be mailed CN 12.37 and CN 12.38 in January 2013.

The notices remind clients of their possible eligibility for an EITC payment, how to apply for an EITC payment, and where they can receive free tax counseling and tax preparation services.

State Earned Income Tax Credit

Illinois has a state earned income tax credit for low-wage workers. For the 2012 tax year, this credit will provide up to $442 in state tax relief for working families who qualify for the federal EITC. The state EITC is worth 7.5% of the federal EITC payment and can reduce the amount of state taxes owed or increase the refund amount. deleted text

Client Action

A client who was employed in 2012 may receive the federal EITC payment by filing for it with their federal tax return.

A person who did not apply for an EITC payment for any of the last 3 years in which they worked may be eligible to receive retroactive EITC payments for any or all of those years by filing an amended return.

The state income tax form asks for the amount of the federal EITC a family is eligible to receive. The taxpayer will receive 7.5% of that amount as a credit to reduce the amount of state taxes owed or increase the refund amount.

Family Community Resource Center (FCRC) Action

The IRS provides EITC brochures and posters to the FCRCs each year in late January or early February. Use current supplies until the new ones arrive. Provide the brochures to clients as appropriate.

In every face-to-face meeting or telephone contact with a client who had any earned income in 2012, ask them if they filed for an EITC. If they didn't, encourage them to do so.

Policy concerning how to treat the EITC for Cash, Medical, and SNAP programs  is as follows:

The EITC is exempt both as an asset and as income. 

Free Tax Counseling and Preparation

Free community-based tax counseling and preparation is available to all low-income families and individuals in the Chicago area and in most larger downstate towns. A list of free tax preparation locations is shown on CN 12.38. All local and specialized work and training offices have a list of tax services available in their area. Inform clients of this when appropriate.

[signed copy on file]

Michelle R.B. Saddler

Secretary, Illinois Department of Human Services

Forms referenced:

  • CN 12.37
  • CN 12.38