Virginia Earned Income Tax Credit

Virginia gives lower-income workers three credits on the state return, and you choose the one that pays best: a refundable EITC equal to 20 percent of your federal Earned Income Tax Credit, a nonrefundable EITC also at 20 percent, and the Credit for Low Income Individuals, worth up to $300 per exemption. You may claim only one, and all three go on Schedule ADJ attached to your Virginia return.

For most families the refundable EITC wins, and the rate is better than older articles say: it is 20 percent now, not the 15 percent from when refundability first arrived. Refundable means the credit can exceed your tax bill and come back as cash. To claim either Virginia EITC you must have qualified for the federal EITC on your federal return, so that federal claim comes first.

The CLI works differently and occasionally wins. It pays up to $300 for each personal and dependent exemption when your total family Virginia adjusted gross income falls below the federal poverty guidelines. Family means everyone: combine your VAGI with your spouse's and dependents', even if they did not have to file. It cannot exceed your tax, and only one spouse may claim it.

A few disqualifiers apply to all three: being claimed as a dependent on someone else's Virginia return, or claiming certain subtractions like the National Guard wage subtraction. If your situation is unusual, run both calculations before picking.

The mechanics are one line of discipline: file the federal return and claim the federal EITC, then file the Virginia return with Schedule ADJ and the credit section completed. Free help exists through VITA sites in season; dial 2-1-1 to find the nearest one.

Money at tax time pairs with money all year. The same working income that earns these credits often qualifies the household for SNAP at 200 percent of poverty, Cardinal Care for the kids, and fall Fuel Assistance. CommonHelp checks them in one application.