About 150,000 households in the state are missing out on getting thousands of dollars more back during tax season, a new report from The Commonwealth Institute found.
The Richmond-based, nonpartisan research organization found only about 80 percent of Virginians who are eligible for the federal Earned Income Tax Credit — for low-to-moderate income taxpayers and those with children — actually claim it on their tax returns, according to the study.
The credit can net a household up to $6,000 more dollars from the federal government, depending on income and the number of children claimed on a return.
Eligible residents of rural areas, the self-employed, those who don’t speak English well and grandparents are among some of the groups least likely to claim the credit.
There are ways to get more people to claim the credit, The Commonwealth Institute said. Strategies include more outreach and making Virginia’s state earned-income credit fully refundable.
“Virginia lawmakers have many tools at hand to influence uptake rates in the state,” the report says. “Chief among them is their ability to make the state’s corresponding earned income credit refundable — meaning that a low-income tax filer would receive a refund for the amount of the credit that exceeds their income tax, offsetting state and local taxes that take up a disproportionate share of their income.”
Read the full report here.
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