Working Family Credit

The Working Family Credit is a Minnesota state tax credit that helps low-income people who are working, especially those who are raising children. It is a state version of the federal Earned Income Tax Credit (EITC). Most people who get the EITC also get the WFC. If you get the WFC, you will either get a larger refund (money given back to you) or pay less in state taxes.

The Working Family Credit is administered by the Minnesota Department of Revenue.

The WFC is mostly for working parents (or others such as grandparents, relatives or foster parents) who are raising one or more children in Minnesota. There are also rules about which children count for the WFC (see the next question). Some people who are not raising children, but who work can also get the WFC (see Question 6). Your income from work has to be below the limits to get the WFC. (See Question 23 for the income limits.) Lots of people who can get the WFC do not get it because they do not file their taxes. They miss out on money that is meant for them.

Children who count for the WFC are called “qualifying children.” To be a qualifying child, a child has to be:

• A son, daughter, adopted child, foster child placed by an agency, grandchild, stepchild, brother, sister, stepbrother, stepsister (or a descendent of any of these), who lived in your home for at least six months during the past year.
• Under age 19, or under age 24 if a full-time student. Totally and permanently disabled children can be counted at any age.

New for tax year 2009 and later:

The change in the Uniform Definition of a Child adds two new rules to the definition of a “qualifying child.” The child must:

• Be younger than the person claiming the child
• Not have filed a joint return other than to claim a refund

A child has to live with you at least 6 months of the year to count for the WFC. If a child’s parents (or caregivers) do not live together, only one of them can count (or claim) a child for the WFC. If a child lives with you half of the year and another parent or person half of the year, there is a “tie-breaker rule” that says who can claim the child. This rule says that if more than one person can claim a child, but only one of them is the child’s parent, then the parent gets to decide who can claim the child. If both parents lived with the child for the same amount of time (six months each), then the parent with the highest income decides who can claim the child. If children spent part of every week with one parent, and the other part with the other parent, you should count up the number of days the child spent with each parent.

Single adults or couples who are not raising children, but are working, can also get a smaller WFC. Adults without children have to be at least 25 years old and under 65 years old to get the WFC. The income limits to get the WFC are much lower for people who are not raising children. (See Question 23 for the income limits.)

You can only get the WFC if you file your taxes (or have someone file them for you). If you pay someone to do your taxes, it will probably cost you $120 or more. There are also free tax preparation sites throughout Minnesota. Trained, professional volunteers at the these sites will prepare your taxes at no cost to you. To find a free tax site near you, click here or call United Way 2-1-1 by dialing 2-1-1 (651-291-0211 for cell phone users).

Yes. Married couples cannot get the WFC if they file separately. If you have your taxes done for you, your preparer will know how to do this.

Yes. For Tax Year 2012, if you have more than $3,200 in investment income, you cannot get the WFC. (This does not apply to most people.) Other assets such as money in a checking or savings account or other items you own do not matter for the WFC.

No. Legal immigrants can also get the WFC, but you have to have a Social Security Number (valid for work) for yourself, your spouse (if you have one) and your qualifying children to get it.

You can only get the WFC if you earned income in Minnesota. If you earned money from working in Minnesota for just part of the year, you will get a smaller credit than if you worked in Minnesota all year.

If you lived on a reservation and worked only on the same reservation in Minnesota during the year, your income should not be taxed by the state of Minnesota and you also cannot get the WFC. But if you lived on a reservation and worked off of the reservation, or if you did not live on a reservation but worked on one, you can get the WFC (there are some exceptions to this rule for Minnesota Chippewa Tribe members). You must also meet the other guidelines to get the WFC. Even if you cannot get the WFC, you may be eligible for other state tax credits.

Usually, you can get your Minnesota state refund within 5 days of filing if you have a bank account and use direct deposit. If you don’t have a bank account, it may take up to two weeks to receive your refund in a check.

There is no application because the WFC is not a program. To get the WFC, you have to file your state income taxes. To find a free tax preparation site near you click here.

No.

Because many Minnesotans with low incomes can get money back at tax time. If you do not file your taxes, you could miss out on lots of money. Plus, you can get your taxes done for free at many places in Minnesota. To find a list of free tax preparation sites throughout the state of Minnesota, click here or call United Way 2-1-1 by dialing 2-1-1 (651-291-0211 for cell phone users).

You can still get the WFC for up to three years before this tax year if you didn’t get it, but were supposed to get it. This is called “back-filing.” Your tax preparer can help you back-file if you need to.

There are several locations across Minnesota where you can get your taxes done for free. For AccountAbility Minnesota's free tax preparation sites click here. For other free tax preparation sites in Minnesota click here or call United Way 2-1-1 by dialing 2-1-1 (651-291-0211 for cell phone users).

If you pay someone to file your taxes, it will probably cost you at least $120, and it could cost much more. If you go to a free tax preparation site (VITA or AARP), you will not have to pay anything. For AccountAbility Minnesota's free tax preparation sites click here. For VITA or AARP tax preparation sites in Minnesota click here or call United Way 2-1-1 by dialing 2-1-1 (651-291-0211 for cell phone users).

It is helpful (but not required) to bring your tax return from last year. Also bring the following things:

• A picture ID.
• Cards showing Social Security Numbers or Individual Taxpayer Identification Numbers (ITINs). You will also need to know the birth dates for each member of your family.
• It is helpful to bring a copy of your tax return from last year. Taxpayers can file three years back for unclaimed tax credits.
• Direct deposit information (such as a check) showing your bank account and routing numbers.
• Year-end income statements showing income from all jobs or payments (W-2 or 1099 forms)
• Year-end income statements for MFIP, SSI, MSA, GA, Social Security payments, veteran’s benefits and worker’s compensation.
• If you have a child in school in kindergarten through grade 12, bring receipts that show the school expenses that you paid for. Examples of school expenses are pens, pencils, notebooks, folders, purchase or rental of an instrument used in school, music lessons, etc. (Optional)
• Tuition expenses you paid to attend a university or technical college (Form 1098-T). (Optional)
• Interest paid on student loans (Form 1098-E)
• Daycare expenses. Bring your provider’s name, address, and tax ID or Social Security Number. (Optional)
• If you are a renter, bring your Certificate of Rent Paid (CRP).
• If you are a homeowner, bring your statements showing mortgage interest and real estate taxes paid (Form 1098) and Property Tax Payable (mailed by the county in March). (Optional)
• Charitable donations. (Optional)
• If you have a small business, daycare, or self-employment income, contact the tax site to see what else you need to bring.

These are all names for loans that paid preparers offer their customers. If you get one of these loans, you can usually get your refund quicker, but these loans are very expensive. Usually the annual percentage rate (APR) is over 200%! That means you will lose a large part of your refund money if you take out one of these loans. If your refund is delayed for any reason, you will pay even more money for this loan. We recommend that you don’t take out a loan like this. If you can wait a couple weeks after you file, you will get all of the money that you are supposed to get.

These types of income count as earned income for the WFC: Wages, salaries, self-employment earnings, tips, union strike benefits, and long-term disability benefits (if received before retirement). These types of income do not count as earned income for the WFC: nontaxable combat pay, MFIP, MSA, or GA benefits, worker’s compensation, unemployment insurance benefits, alimony, child support, interest and dividends, Social Security and railroad retirement benefits, pensions and annuities, variable housing allowances for the military, and earnings for work done while in jail or prison.

It is your income before taxes and deductions are taken out.

For Tax Year 2012, to get the WFC, all of your earned income and adjusted gross income has to be below the limits. The limits are different for different groups of people.

For Single Parents:

• If you are a single parent raising one child, your earned income and adjusted gross income has to be below $36,920
• If you are a single parent raising two children, your earned income and adjusted gross income has to be below $41,952.
• If you are a single parent raising three or more children, your earned income and adjusted gross income has to be below $45,060.

For Married Parents Filing Jointly:

• If you are married and raising one child, you and your spouse’s earned income and adjusted gross income combined has to be below $42,130.
• If you are married and raising two children, you and your spouse’s earned income and adjusted gross income combined has to be below $47,162.
• If you are married and raising three or more children, you and your spouse’s earned income and adjusted gross income combined has to be below $50,270.

For Those Not Raising Children:

• For single adults, your earned income and adjusted gross income has to be below $13,980.
• For married adults, you and your spouse’s earned income and adjusted gross income has to be below $19,190.