Taxpayers may be in line for a larger refund this year because of the federal Earned Income Tax Credit (EITC) and its Illinois counterpart, the Illinois Earned Income Credit (EIC). But to get it, individuals must file a tax return and claim it.

Friday, January 29, 2021, marks the 15th anniversary of EITC Awareness Day, a nationwide effort to increase awareness about federal EITC and state EIC. The EITC and EIC are powerful tools that reward low- and moderate-income taxpayers for their hard work, yet thousands of eligible taxpayers fail to claim this refundable credit on their taxes.

“I encourage taxpayers to check their eligibility for the state EIC and federal EITC,” said David Harris, Illinois Department of Revenue Director. “The earned income credit puts thousands of dollars in the pockets of hard-working families every year. Even if an individual does not owe any tax, they may be eligible. That’s money that can be used for groceries, rent, utilities and other bills.”

Anyone eligible for the federal EITC automatically qualifies for the Illinois EIC, which is a refundable tax credit worth up to 18 percent of a taxpayer's federal claim. Despite that, in 2020, more than 13,000 Illinoisans claimed a federal EITC credit without also claiming the state EIC, leaving over $7 million dollars unclaimed. Recently, the Pritzker Administration and IDOR commenced a new outreach initiative last October to increase Earned Income Credit (EIC) participation by targeting taxpayers who qualified but failed to claim the credit. This outreach resulted in over 10,000 additional refunds issued totaling more than $5.5 million.

To be eligible for EIC/EITC, taxpayers must meet certain income and residency qualifications and file a tax return, even if they do not owe any tax or are not required to file. The Internal Revenue Service recommends that all workers who earned around $56,844 or less learn about EITC eligibility and use the EITC Assistant to find out if they qualify. Taxpayers must be eligible for federal EITC to receive the state EIC. EITC can mean up to a $6,660 refund when a taxpayer files a return with qualifying children. Workers without a qualifying child could be eligible for a smaller credit up to $538. According to the Internal Revenue Service, the average amount credited for 2020 was $2,461.