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Earned Income Tax Credit: Great, but Where Is It?

A couple of years in the past, in 2017 to be actual, our lawmakers enacted an Earned Income Tax Credit (EITC), which then was touted as a very fantastic technique to ship tax aid to working households.

If it’s correctly claimed, that’s.

One alert reader, in a Star-Advertiser letter to the editor, puzzled out loud how persons are supposed to determine declare the credit score…and with good motive.  So, we’re going to stroll by way of the return and provide you with some spoilers.

Most working households in Hawaii, and any that might qualify for the EITC, would want to file Form N-11, which is the Hawaii revenue tax returns for residents of this state.  The type, nevertheless, doesn’t point out earned revenue tax credit score.  At all.

Going to the directions for Form N-11 doesn’t assist a lot.  The type mentions “earned income tax credit” in a few locations, each whereas speaking about different issues.  It doesn’t inform you declare this credit score.

So, the place do you even put down a quantity for the Hawaii earned revenue tax credit score as soon as you determine what the quantity is?

Here’s the spoiler!  It goes on line 35, which says, “Total nonrefundable tax credits (attach Schedule CR).”

Okay, so we now know that we have to pull one other type, referred to as Schedule CR, to say the EITC.

Where do we discover this kind?  If you look by way of the Department of Taxation’s web site and look by way of all of the types beginning with the letter N (which is a logical place to look as a result of that’s the place you’d discover Form N-11 and its directions), you gained’t discover it.

Spoiler:  Look by way of the Department’s web site beneath “Tax Forms Beginning with S.”  Because “Schedule CR” begins with S.

Okay, now we’ve Schedule CR.  Where on the shape does it point out the EITC?  Well, it doesn’t.

Off to the Schedule CR directions we go.  Aha!  There is certainly one thing that mentions the EITC.  It says that the EITC quantity is reported on Line 25, and that you will want to connect Form N-356.

On Schedule CR itself, line 25 merely says, “Attach Form N-356 (N-11 and N-15 filers only).”  But alas!  There are three completely different columns on line 25.  Column (a) says, “Total New Credit Claimed for this Tax Year.”  Column (b) says, “Total Credit Applied to this Tax Year.”  Column (c) says, “Unused Credit to Carryover to Next Tax Year.”

Fortunately, when you pull Form N-356 and get by way of each pages, the shape will inform you how a lot to place in Columns (a), (b), and (c).

So, right here’s the last word spoiler:  To declare the EITC, you might want to pull Form N-356 and Schedule CR, and you might want to connect them each to your revenue tax return.

To these of you who need to declare the EITC and also you (or your tax preparer) have discovered this text:  Congratulations!  Now you understand what types to tug and the place the quantities from the types go to.

For these you who need to declare the EITC and also you (or your tax preparer) haven’t discovered this text:  Good luck!  You’re going to wish it.

And, if you happen to’re a lawmaker otherwise you’re on the Department of Taxation, you would possibly need to take into account making this credit score simpler to search out so the working households that we need to assist a minimum of have a preventing likelihood at getting this aid.

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