Welcome to the earned income tax credit, or EITC. It's known as a "refundable" credit because, unlike many other tax breaks, you can get money from Uncle Sam even if you don't owe a penny in tax.
But to collect, you have to file a tax return. Even though April 15 has come and gone, it isn't too late to act.
The amount of the credit varies depending on your income, family size and "filing status" (such as single or married filing jointly). The average credit amount last year was around $2,200, the Internal Revenue Service says.
More than 27 million workers and families received a total of nearly $62 billion for the 2011 tax year. Even so, about one in five of those eligible miss out on this credit, according to IRS estimates.
Some people may have overlooked the credit when they filed because they weren't aware of its existence or couldn't understand the rules. Or perhaps they didn't think of it because they weren't obligated to file. For help in checking on eligibility, go to the IRS website (www.irs.gov) and look for "EITC Assistant."
When checking to see whether you might be eligible, don't focus only on last year. You might also have time to file for a prior year that you overlooked. To file an "amended" return, use Form 1040X. Generally, you have to file Form 1040X to claim a refund within three years of the date you filed your original return.
The IRS site also has details on free-filing options. Look for "Free File," free tax preparation sites (or call 800-906-9887), or IRS taxpayer assistance centers.
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