Louisiana has released its mandatory 2010 Earned Income Credit posting pursuant to the Internal Revenue Service’s published 2010 income limits for the Federal Earned Income Tax Credit (EITC).
This means that all Louisiana Employers must display the latest EITC posting effective immediately.
While the EITC income limits and credit amounts are adjusted annually, an important new tax break comes in the form of the additional, temporary child tax credit that applies to tax years 2009 and 2010. Under the American Recovery and Reinvestment Act (ARRA), more families will be eligible for the additional child tax credit because of a change to the way the credit is figured.
Earned Income Tax Credit
The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low to moderate income working individuals and families. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
To qualify for Earned Income Tax Credit or EITC, taxpayers must meet certain rules and those who qualify to claim EITC on their federal income tax return, also may be eligible for a similar credit on their state or local income tax return.
ARRA and the Earned Income Tax Credit
The ARRA provides a temporary increase in the earned income tax credit (EITC) for taxpayers with three or more qualifying children. ARRA reduces the minimum earned income amount used to calculate the additional child tax credit, permitting more taxpayers to use the additional child tax credit and increasing the amount of the payments they may receive. Taxpayers who cannot take full advantage of the child tax credit because the credit is more than the taxes they owe may receive a payment for some or all of the credit not used to offset their taxes. It is a refundable credit, which means taxpayers may receive refunds even when they do not owe any tax.
ARRA also increases the beginning point of the phase out range for the credit for all married couples filing a joint return, regardless of the number of children.
These changes apply to 2009 and 2010 tax returns. Employers are encouraged to advise their employees of the EITC and expanded credit available under the ARRA so that workers can make informed decisions about their federal tax withholding to avoid having too much or too little withheld from their pay.
Take Action Now
If you have a Louisiana All-On-One™ Poster dated 11/2009, you just need a Peel-n-Post Update. If your Louisiana All-On-One™ Poster is older than 11/2009, you should replace your entire poster.