Earned Income Tax Credit is a refundable credit for low-income taxpayers who work. The EITC amounts to a sizeable bit of money that is often used to pay down debt or for other necessities, but it can provide an opportunity to begin asset-building activities, such as opening or contributing to a savings account. The asset-building potential that becomes available with the EITC affords a real and tangible step toward financial independence for working individuals and families, therefore making it an important project for TAFI.

According the Brookings Institute, the EITC is arguably the most effective anti-poverty program in America and lifts more children out of poverty than any single program or category of programs in the United States. Without the EITC, the poverty rate among children would be 25% higher. Next tax season, the credit is as much as $4,700 for some families. Yet, each year, millions of dollars in EITC refunds go unclaimed in Tennessee by working families unaware of this credit. To qualify for the EITC, taxpayers must work full or part time and have earned income of at least $1. The amount of the credit depends on income and family size.

To qualify, taxpayers must meet certain requirements and file a tax return even if they did not earn enough money to be required to file a tax return.

Tax Year 2007 EITC Eligibility Requirements:

Single/ Head of Household	Max Income	Max Credit
No Children	$12,590	$428
One Child	$33,241	$2,853
Two or More Children	$37,783	$4,716