You may be eligible for a tax refund or tax credit if you or anyone in your household worked in 2007. If so, you'll owe less in taxes and may even get cash back. Even if you don't owe income tax, you can get the cash back through the Earned Income Credit (EIC). The Federal Child Tax Credit and Child and Dependent Care Tax Credit may also be available to you.
Earned Income Credit
The Earned Income Tax Credit (EITC), sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the Earned Income Tax Credit exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.
The Earned Income Tax Credit has no effect on certain welfare benefits. In most cases, Earned Income Tax Credit payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments. In some circumstances, the Earned Income Tax Credit is counted as income for aged, blind or disabled people who work.
Oklahoma Earned Income Credit
If you qualify for the Federal Earned Income Credit, you may also receive the Oklahoma Earned Income Credit. An informational handout is available in English and Spanish. You may claim a credit equal to 5 percent of the earned income credit allowed on your federal tax return. You may complete the 2007 511 Packet available on the Oklahoma Tax Commission Web site to claim the credit.
Federal Child Tax Credit
You may also qualify for up to $1,000 per child under the age of 17 depending on your income. There are tests to be met in order to claim someone as a qualifying child such as the relationship test, residency test and age test. Questions and answers about the Child Tax Credit can be found at the National Women's Law Center and the Center on Budget and Policy Priorities Web sites.
Child and Dependent Care Tax Credit
The federal Child and Dependent Care Credit is a tax benefit of up to $2,100 that helps families pay for child care they need in order to work or look for work. The credit also is available to families that must pay for the care of a spouse or an adult dependent who is incapable of caring for him or herself. Questions and answers about the Child and Dependent Care Tax Credit can be found at the National Women's Law Center and the Center on Budget and Policy Priorities Web sites.
Oklahoma Child Care Tax Credit
The Oklahoma Child Care Tax Credit is a state tax credit of up to $420 that helps families pay for child care. If you are allowed a credit for child care expenses on your federal return, you are allowed a credit against your Oklahoma tax equal to 20 percent of the credit for child care expenses allowed by the IRS code. Your allowed federal credit cannot exceed the amount of your federal tax reported on your federal return. You may complete the 2007 511 Packet available on the Oklahoma Tax Commission Web site to claim the credit.
Sales Tax Rebate
The Sales Tax Relief Act allows the Oklahoma Department of Human Services (OKDHS) to make a $40 sales tax refund to persons who received State Supplemental Payments (SSP) every month in 2007 without a break in benefits and those whose care in a nursing facility was paid by SoonerCare (Medicaid) for the entire 2007 tax year. Persons who received TANF cash assistance for any month during the 2007 tax year do not qualify for the refund. Additional information is provided on OKDHS Appendix 08AX031E (.pdf, 1 pp, 57 KB) (formerly Appendix A-003), Facts about the Sales Tax Relief Act. You can file for this rebate yourself through the Oklahoma Tax Commission on Form 538-S that is included in the 2007 511 Packet available on the Oklahoma Tax Commission Web site.
Do you qualify? | Earned Income Tax Credit information | Special rules
Earned Income Tax Credit frequently asked questions | Advance Earned Income Tax Credit frequently asked questions
Free tax return preparation | Life events that may impact your taxes
Find out if you are eligible for the Earned Income Tax Credit by using the Internal Revenue Services (IRS) eligibility tool.
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Special rules apply for calculating earned income for members of the U.S. Armed Forces in combat zones, members of the clergy, hurricane victims and those with disability retirement income.
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You can receive part of your Earned Income Credit in your paycheck by completing a form and giving it to your employer.
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Internal Revenue Service-certified volunteers provide free tax assistance through the Volunteer Income Tax Assistance (VITA) program for persons with low-to-moderate income and through the Tax Counseling for the Elderly (TCE) program for persons age 60 and older.
The VITA Program offers free tax help for low- to moderate-income people who cannot prepare their own tax returns. Volunteers, sponsored by various organizations, receive training to help prepare basic tax returns in communities across the country. VITA sites are generally located at community and neighborhood centers, libraries, schools, shopping malls and other convenient locations. Some locations also offer free electronic filing.
To find the nearest VITA site, call 1-800-829-1040 or visit the Oklahoma Tax Commission Web site to get a city listing of Oklahoma tax assistance sites.
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There are many times we experience life events that have a tax impact, too.
From birth through childhood, marriage or divorce, job loss or new career -- see how these life events and others can affect how you file your taxes.
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