Essentia software nannypay3/31/2023 In June 1996, the IRS began to issue Individual Taxpayer Identification Numbers (ITINs) to unauthorized and other aliens unable to obtain Social Security numbers. Virtually all persons with US earnings are required to file US income tax returns, but only legal immigrants authorized to work in the US may obtain Social Security numbers. If a taxpayer obtains EITC benefits fraudulently, she can be barred from the EITC for two to 10 years. About half of those claiming the EITC uses a tax preparer and some of these preparers are believed to fraudulently inflate the number of dependents to obtain a larger refund. According to the IRS, there were $4 billion in excess EITC payments in 1994. The IRS in April 1997 released a study of the EITC for 1994 for returns filed in April 1995, which concluded that there is a very high error rate in EITC returns, including a high error rate in the 50 percent of such returns filed by tax preparers. By comparison, only about 60 percent of those eligible for Food Stamps receive them. Over 80 percent of the families eligible to claim the credit do so. The EITC is designed to bring the income of a family of four with a full-time, year-round worker at least up to the poverty line, taking into account the value of the family's food stamps and the burden of its payroll taxes. In 1994, the two million Hispanic households that claimed the EITC were 26 percent of all households claiming the EITC. Beginning in 1997, those filing tax returns without valid Social Security numbers are ineligible for EITC benefits. Until the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 was approved in August 1996, unauthorized aliens were eligible for the EITC benefits. The cost of the EITC has risen significantly, from $7 billion in 1990 to $25 billion in 1996. The size of the credit varies according to family size, since the poverty level varies with family size. For a family with two or more children, the refundable credit reaches a maximum level of $3,370 when a worker earns $8,425, remains at that level through earnings of $11,000, and then gradually declines to zero when earnings reach $27,000. The EITC matches each dollar earned with a refundable tax credit of between 7.65 cents and 40 cents, depending on family size, until an income ceiling is reached. Many immigrants with low US earnings do not file income taxes, while others file returns to take advantage of the Earned Income Tax Credit, a refundable tax credit available since 1975 to low-income, working taxpayers. The US tax system is based on individuals assessing themselves the taxes they owe and forwarding the monies owed to the IRS.
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