New earned income credit rules lucrative for some Airmen

  • Published
  • By Master Sgt. Scott Wagers
  • Air Force News Agency
RAMSTEIN AIR BASE, Germany (AFPN) --  Filing his family's taxes each year online, Master Sgt. Ron Przysucha says he normally receives about $3,000 in tax returns. This year however, he was taken by surprise when the same Web site he traditionally uses calculated his return at nearly $8,000.

"I immediately thought it was a mistake and I didn't want to owe the government money so I went to the IRS Web site to verify the information for military members and it told me that there was a change in the (earned income credit ) rules," said Sergeant Przysucha, who is a television broadcaster assigned to Air Force News, Det. 4.  

The tax laws affecting military taxpayers have changed significantly over the last few years, said Capt. Mary Ellen Payne, the officer in charge of the tax center at Ramstein Air Base. 

"In the past, military pay allowances such as variable housing allowance and cost-of-living allowance were traditionally included as part of your earned income, even though those allowances weren't taxed. This would put most military members over the annual income threshold of qualifying for the earned income credit," Captain Payne said.

"Also non-taxable combat pay is no longer included in your annual earned income. If someone was gone to the desert for a significant period of time then his or her annual income is going to be significantly smaller which may better qualify him or her for earned income credit," she said.

"Your best chances of qualifying are if you're a couple filing jointly with two children have an annual income threshold of around $39,000," Captain Payne said.

There are six different income thresholds based on the structure and employment status of each family as well as the number of children included in the family.
The earned income credit is a law that was created to give tax breaks to working families. It's a refundable credit meaning that even if you have no tax liability -- in other words, you don't owe taxes for the year and you're scheduled to receive back everything you paid out over the calendar year, you can still qualify to receive earned income credit on top of the money that was withheld throughout the year. The maximum amount of income credit being paid out is $4,716.

Airman 1st Class Michael Schindler of the 723rd Air Mobility Squadron saw his annual return increase from $2,300 to nearly $5,000.

"I guess I wasn't filing my taxes right but now I am. I hope to use the extra money to buy a better car," he said.

"The last thing that's important to know is that it's difficult for the tax office to estimate how much people will receive on their return without using a certain type of software because there are many variables that affect what you qualify for," Captain Payne said.

"That said, we encourage people to come to us and we'll help them understand exactly how much they qualify for," she said.

Other mandates for earned income credit qualification:
-- You cannot file "married, filing separately" to qualify for earned income credit. Partners must file jointly. 
-- Both partners filing jointly and all claimed children must possess a U.S. issued social security number. 
-- If you have a foreign spouse, he or she must possess a U.S. issued social security number (not an "ITIN" -- Individual Tax Identification Number) 
-- You have to have lived in the U.S. for at least six months out of the year. 
-- Military assigned to oversea bases qualify for 6 months U.S. occupancy 
-- Civilians working at oversea bases do not qualify for U.S. occupancy

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