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Don’t forget about state earned income tax credit, Dept. of Revenue reminds taxpayers

January 28, 2010

The Louisiana earned income credit is equal to 3.5 percent of the federal EITC. For the 2009 tax year, the federal EITC is worth a maximum of $5,657, depending on such factors as your filing status, income level and number of children that you claim as dependents. According to the IRS, the income thresholds for the federal EITC are:

  • $13,440 ($18,440 married filing jointly) if you do not have a qualifying child
  • $35,463 ($40,463 married filing jointly) if you have one qualifying child
  • $40,295 ($45,295 married filing jointly) if you have two qualifying children
  • $43,279 ($48,279 married filing jointly) if you have three or more qualifying children

The maximum amounts of the federal EITC are as follows:

  • $5,657 with three or more qualifying children
  • $5,028 with two qualifying children
  • $3,043 with one qualifying child
  • $457 with no qualifying children

To calculate the amount of Louisiana earned income credit, multiply the federal EITC amount by .035 (3.5 percent). Some examples:

  • For taxpayers with three children who file a federal return as married filing jointly, earning $36,000, the federal EITC is $2591. These taxpayers are entitled to claim a Louisiana earned income credit of $91.
  • For a taxpayer with two children who files a federal return as single, head of household, or qualifying widow(er), earning $30,000, the federal EITC is $2,173. The taxpayer is entitled to claim a Louisiana earned income credit of $76.
  • For taxpayers with one child who file a federal return as married filing jointly, earning $20,000, the federal EITC is $5,657. These taxpayers are entitled to claim a Louisiana earned income credit of $198.

Eligible Louisiana residents can claim the state earned income credit on line 21 of the Louisiana Resident Individual Income Tax Return (Form IT-540) in the section titled “Refundable Tax Credits.”

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