Millions in Low-income Tax Credits Unclaimed

Millions in Low-income Tax Credits Unclaimed

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SALT LAKE CITY (AP) -- Each year Utah's low-income residents fail to claim between $50 million and $80 million in earned income tax credits, despite free tax-preparation services and some public education efforts by the Internal Revenue Service and other government agencies.

Ranging from $2,600 to $4,300 for a family of four, the tax credit can increase a person's wage by up to $2 per hour. That's enough to lift some above the poverty line, which is $12,830 for a family of two and $19,350 for a family of four.

"It can mean the difference of going with or without child care or transportation," state Rep. Tim Cosgrove, D-Murray, said. "Working families are eligible. They just don't know about it, because so many fall below the earnings threshold for filing taxes."

Cosgrove plans to sponsor legislation to establish a statewide coordinator to promote the credits with Utahns who apply for food stamps, welfare and job assistance.

Utah's arm of The United Way also has received a $150,000 federal grant to study the economic benefits of the tax credit and to mobilize a unit of IRS-trained volunteers to help families statewide fill out their tax forms.

The organization also will use the funds to supplement its "Utah Saves" campaign, which urges families to use a portion of tax credits to set up savings accounts, retire debt or buy homes.

(Copyright 2005 by The Associated Press. All Rights Reserved.)

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