Roughly $61 billion in EITC was given to 25 million eligible workers and families in 2019, according to the IRS. The Earned Income Tax Credit (EITC) is a tax credit that is refundable and averages an amount of $2,504.
A taxpayer may receive various EITC letters and notices. They are the following:
In this article, we will break down the most important information that you need to know about each of them and the reasons why any of these EITC letters or notices might be sent to you.
1. IRS Notice CP74 - This notice will be sent to you to let you know that you have been re-certified for the Earned Income Credit. This is an Account Information or change type of notice. The most common reasons why you receive the IRS Notice CP74 is either your Earned Income Credit in a prior year was disallowed, you requested EIC recertification or the IRS want to let you know that you’ve re-certified for the EIC and that in the future, you no longer need to submit Form 8862, Information to Claim Certain Credits After Disallowance. You will be notified that your refund is being processed through this notice.
2. IRS Notice CP27 - The purpose of this notice is to let you know that even though you may not have qualifying children, there is still a possibility that you will still qualify for the earned income tax credit. This is a return accuracy type of notice. The reasons why this is sent to you are either because you have filed a tax return with the IRS, they determined that you may qualify for the earned income tax credit based on your income, or to determine whether your do qualify for the EITC. In order to determine if you are eligible, you need to complete the worksheet enclosed in the notice. Send the completed and signed worksheet to the IRS once you determined you are eligible and if the IRS agrees, a refund will be given to you in six to eight weeks.
You have two options to address IRS Notice CP27:
3. IRS Notice CP09 - This is sent to you if the IRS thinks you may qualify for the earned income tax credit because you have dependent children. This means you may receive a refund. This is a return accuracy type of notice. There are several reasons why you received IRS Notice CP09 as well. It’s either you filed an original return with the IRS where you did not claim the earned income tax credit (EITC) even though you listed dependent children on your tax return or if the IRS determined that you may qualify for the EITC and that you may be given a refund because of the credit.
If there’s a possibility that you will qualify for the credit, the IRS will send you the CP09 to inform you about the credit. You will be asked to complete and return the enclosed EITC eligibility worksheet if you find out that you are indeed, eligible for EIC. A refund will then be sent to you in six to eight weeks if the IRS confirms that you qualify for the EITC. You don’t need to do anything if you determine that you do not qualify for the credit.
To address IRS Notice CP09, you will be given two options:
The IRS can be dealt with by a tax professional if you choose to hire one to represent on your behalf. You can easily make an appointment online or via a call to a tax agency near you. You don’t have to go through the stress of preparing your taxes or responding to EITC letters and notice on your own. You can always ask a tax professional to gather the documents or file your tax return for you for a faster and stress-free tax filing.
