The Earned Income Tax Credit has helped workers with low and moderate incomes get a tax break for 40 years. Yet, one out of every five eligible workers fails to claim it. Here are some things you should know about this valuable credit:

• Review Your Eligibility. If you worked and earned under $53,267, you may qualify for EITC. If your income or family situation has changed, you should review the EITC eligibility rules. You might qualify for EITC this year even if you didn’t in the past. If you qualify for EITC you must file a federal income tax return and claim the credit to get it. This is true even if you are not otherwise required to file a tax return. Don’t guess about your EITC eligibility. Use the EITC Assistant tool on IRS.gov. The tool can help you find out if you qualify for the credit. It can also estimate the amount of your EITC.
• Know the Rules. You need to understand the rules before you claim the EITC, to be sure you qualify. It’s important that you get this right. Here are some factors you should consider:

o If you are married and file a separate return you do not qualify for EITC.
o You must have a Social Security number that is valid for employment for yourself, your spouse, if married, and any qualifying child listed on your tax return.
o You must have earned income. Earned income includes earnings from working for someone else or working for yourself.
o You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules. If you have a child who lived with you for more than six months of 2015, the child must meet age, residency, relationship and the joint return rules to qualify.
o If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.

WASHINGTON — The Internal Revenue Service today reminded taxpayers that it issues 90 percent of refunds in less than 21 days. The best way to check the status of a refund is online through the “Where’s my Refund?” tool at IRS.gov or via the IRS2Go phone app.
"As February approaches, more and more taxpayers want to know when they can expect their refunds," said IRS Commissioner John Koskinen. "There aren't any secret tricks to checking on the status of a refund. Using IRS.gov is the best way for taxpayers to get the latest information."
Many taxpayers are eager to know precisely when their money will be arriving, but checking "Where's My Refund" more than once a day will not produce new information. The status of refunds is refreshed only once a day, generally overnight.
"Where’s My Refund?" has the most up to date information available about your refund. Taxpayers should use this tool rather than calling.
Taxpayers can use “Where’s My Refund?”  to start checking on the status of their return within 24 hours after IRS has received an e-filed return or four weeks after receipt of a mailed paper return. "Where’s My Refund?" has a tracker that displays progress through three stages: (1) Return Received, (2) Refund Approved and (3) Refund Sent.
The IRS2Go phone app is another fast and safe tool taxpayers can use to check the status of a refund. In addition, users can use the app to find free tax preparation help, make a payment, watch the IRS YouTube channel, get the latest IRS news, and subscribe to filing season updates and tax tips. The app is free for Android devices from the Google Play Store or from the Apple App Store for Apple devices.
Users of both the IRS2Go app and “Where’s my Refund” tools must have information from their current, pending tax return to access their refund information.
The IRS reminded taxpayers there's no advantage to calling about refunds. IRS representatives can only research the status of your refund in limited situations: if it has been 21 days or more since you filed electronically, more than six weeks since you mailed your paper return, or "Where’s My Refund?" directs you to contact us. If the IRS needs more information to process your tax return, we will contact you by mail.
The IRS continues to strongly encourage the use of e-file and direct deposit as the fastest and safest way to file an accurate return and receive a tax refund. More than four out of five tax returns are expected to be filed electronically, with a similar proportion of refunds issued through direct deposit.

• You may be required to pay a penalty if you do not have coverage for more than two months. You may face a penalty for each month you do not have minimum essential coverage, meaning you are enrolled in a health plan that complies with the Affordable Care Act. All medical plans on the ConnectedHealth Marketplace meet the requirements for minimum essential coverage, with the exception of short-term coverage.
• If you don’t have coverage, you may have to pay a fee when you file your 2016 taxes. You only pay for the people in your household who are not covered. Your household is considered yourself, your spouse (if you are married), and your dependents.
• The penalty for not having health insurance in 2016 has increased from previous years. The fee is calculated two ways and you would pay whichever is higher:
  • A cost of $695 per adult, and $347.50 per child under the age of 18. The maximum family penalty when calculated this way is $2,085.00.
    OR
  • A cost of 2.5% of your household income. The maximum penalty when calculated this way is the cost of the yearly premium for the national average price of a Bronze plan sold on the federal Marketplace.

If you are on the fence about enrolling for 2016 – keep in mind that having coverage can end up adding money to your wallet or bank account. But don’t delay – you can only enroll in coverage for 2016 until January 31.
After that, you can only enroll if you’ve had a Qualifying Life Event (such as a change to your family status (e.g., marriage, a new child, etc.), loss of previous coverage, or a move to a new area.

​The Affordable Care Act requires you and your dependents to have health care coverage, an exemption from the coverage requirement, or make a shared responsibility payment for any month without coverage or an exemption with your return. This law will affect your federal income tax return when you file this year
Here are five things you should know about exemptions from the health care law’s coverage requirement and the individual shared responsibility payment that will help you get ready to file your tax return.

• You may be eligible to claim an exemption from the requirement to have coverage and are not required to make a payment. If you qualify for an exemption, you will need to file Form 8965, Health Coverage Exemptions,with your tax return.  You can claim most exemptions when you file your tax return. However, you must apply for certain exemptions in advance through the Health Care Insurance Marketplace,
• If you receive an exemption through the Marketplace, you’ll receive an Exemption Certificate Number to include when you file your taxes. If you have applied for an exemption through the Marketplace and are still waiting for a response, you can put “pending” on your tax return where you would normally put your ECN.

• You do not need to file a return solely to report your coverage or to claim a coverage exemption.

If you are not required to file a federal income tax return for a year because your gross income is below your return filing threshold, you are automatically exempt from the shared responsibility provision for that year and do not need to take any further action to secure an exemption.

• If you file a tax return and your income is below the filing threshold for your filing status, you should use Part II of Form 8965, Coverage Exemptions for Your Household Claimed on Your Return, to claim a coverage exemption. You should not make a shared responsibility payment if you are exempt from the coverage requirement because you have income below the filing threshold.

• If you do not have qualifying coverage or an exemption for the year, you will need to make an individual shared responsibility payment for each month without coverage or an exemption when you file your return. Examples and information about figuring the payment are available on the IRS Calculating the Payment page  

You or your tax professional should consider preparing and filing your tax return electronically. 

If you’re still keeping old tax returns and receipts stuffed in a shoe box stuck in the back of the closet, you might want to rethink that approach.
The IRS has teamed up with state revenue departments and the tax industry to make sure you understand the dangers to your personal and financial data.Taxes. Security. Together. Working in partnership with you, we can make a difference.
You should keep your tax records safe and secure, whether they are stored on paper or kept electronically. The same is true for any financial or health records you store, especially any document bearing Social Security numbers.
You should keep always keep copies of your tax returns and supporting documents for several years to support claims for tax credits and deductions.
Because of the sensitive data, the loss or theft of these documents could lead to identity theft and have an economic impact. These documents contain the Social Security numbers of you, your spouse and dependents, old W-2 income and bank account information. A burglar could easily turn your old shoe box full of documents into a tax-related identity theft crime.
Here are just a few of the easy and practical steps to better protect your tax records:
 Always retain a copy of your completed federal and state tax returns and their supporting materials. These prior-year returns will help you prepare your next year’s taxes, and receipts will document any credits or deductions you claim should question arise later.
 If you retain paper records, you should keep them in a secure location, preferably under lock and key, such as a secure desk drawer or a safe.
 If you retain you records electronically on your computer, you should always have an electronic back-up, in case your hard drive crashes. You should encrypt the files both on your computer and any back-up drives you use. You may have to purchase encryption software to ensure the files’ security.
 Dispose of old tax records properly. Never toss paper tax returns and supporting documents into the trash. Your federal and state tax records, as well as any financial or health records should be shredded before disposal.
 If you are disposing of an old computer or back-up hard drive, keep in mind there is sensitive data on these. Deleting stored tax files will not remove them from your computer. You should wipe the drives of any electronic product you trash or sell, including tablets and mobile phones, to ensure you remove all personal data. Again, this may require special disk utility software.
The IRS recommends retaining copies of your tax returns and supporting documents for a minimum of three years to a maximum of seven years.Remember to keep records relating to property you own for three to seven years after the year in which you dispose of the property. Three years is a timeframe that allows you to file amended returns, or if questions arise on your tax return, and seven years is a timeframe that allows filing a claim for adjustment in a case of bad debt deduction or a loss from worthless securities.
To learn additional steps you can take to protect your personal and financial data, visit Taxes. Security. Together. You also can read Publication 4524, Security Awareness for Taxpayers.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

​

Due to an error, taxpayers are receiving Identity Protection (IP) PIN letters with an incorrect year listed. Tax professionals should be advised the IP PIN listed on the CP 01A Notice dated Jan. 4, 2016, is valid for use on all individual tax returns filed in 2016.
The notice incorrectly indicates the IP PIN issued is to be used for filing the 2014 tax return when the number is actually to be used for the 2015 tax return. The IRS emphasizes the IP PIN listed on the CP 01A notice is valid for the 2015 returns. Tax professionals should use this PIN number for 2015 tax returns, which the IRS will begin accepting Jan. 19.