MSU Extension Discusses Federal, Montana Earned Income Tax Credits

According to Montana State University Extension, some Montanans can qualify for state and federal tax credits that may provide funds for working families with children.

Marsha Goetting, MSU Extension family economics specialist, said Montanans should look into the earned income tax credit, the federal government’s largest program for helping working Americans. Created in 1975, the EITC is a refundable federal income tax credit for low- to moderate-income workers. When the EITC exceeds the amount of taxes owed, Goetting explained, the result is a refund to eligible taxpayers who claim and qualify for the credit.

“For 2020, the earned income tax credit at the federal level ranges from $548 to $6,660,” Goetting said. “The amount depends on income and number of children.”

If individuals’ earned income was higher in 2019, they can use the 2019 amount to figure their federal EITC for 2020. This temporary relief is provided through the Taxpayer Certainty and Disaster Tax Relief Act of 2020, Goetting said.

For 2019, earned income and adjusted gross income at the federal level must each be less than $50,162 — $55,952 married filing jointly — with three or more qualifying children; $46,703 — $52,493 married filing jointly — with two qualifying children; or $41,094 — $46,884 married filing jointly — with one qualifying child.

“For most people in Montana, the state EITC is worth 3 percent of the federal EITC claimed,” Goetting said.

For more info, use the EITC assistant at irs.gov/credits-deductions/ individuals/earnedincome- tax-credit/use-the-eitc- assistant.