The Earned Income Tax Credit (EITC) and sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income individuals and families.

The EITC is one of the largest anti-poverty tools in the United States and generally enjoys large bipartisan support. The EITC is a tax reduction and a wage supplement that helps to reduce poverty, increase workforce participation among low-income families, and makes tax systems fairer.

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.

When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. The EITC has no effect on certain welfare benefits. In most cases, EITC 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.

Source: www.irs.gov/eitc

To find IRS--free tax assistance sites near you call toll free: 1-866-234-2942.

Up-to-Date Tax Credit Eligilbility Information for Tax Year 2008.

Source: The Center on Budget and Policy Priorities www.cbpp.org 202-408-1080

* Families with one child who earn less than $33,995 in 2008 (or less than $36,995 for married workers) are eligible for a credit of up to $2,917.
* Families with two or more children who earn less that $38,646 in 2008 (or less that $41,646 for married workers) are eligible for a credit of up to $4,824.
* Workers without a qualifying child who earn less than $12,880 in 2008 (or less than $15,880 for married workers) are eligible for a credit of up to $438.
* Investment Income Limit= $2,950.
* Child Tax Credit is up to $1,000 per qualifying child. The Additional Child Tax Earnings Threshold is $12,050 in 2008.

STATE AND LOCAL EITC

As of tax year 2006, 24 states and the District of Columbia had their own EITC's. These state plans generally mimic the federal structure on a smaller scale, with individuals receiving a state credit equal to a fixed percentage---generally between 15 and 30 percent---of what they are eligible to receive from the federal credit. A few local EITC's have been enacted in cities, including, San Francisco, New York City, and Montgomery, County Maryland.

Source: www.wikipedia.org/wiki/Earned_IncomeTax_Credit

The state of Illinois has one of the lowest EITC's. A family can receive up to a credit of $220 compared to the state of Minnesota--$2,204. Also the legislation and has been fraught with confusing regulatory language.

Source: Center for Tax and Budget Accountability www.ctbaonline.org 312-332-1041

California does not have an EITC. To learn if your state has an EITC: www.cpbb.org

At the top of the page, click on "areas of research" then, "earned income credit"