To File or Not to File - That is the Question

For many of us, the question of whether to file an income tax return is a foregone conclusion. In most cases, a W-2 means an income tax return. But for some taxpayers, the decision is a lot less clear.

The amount of your income, your filing status, age and other factors all help determine whether you must file. And even if you don’t have to file, the IRS says there are indeed times when you should.

So, when do you need to file? We’re glad you asked. We’ve got five reasons to e-file a return – even if you’re not required to.

1. Tax withheld or taxes paid. If your employer withheld federal income tax from your pay; if you overpaid last year and had it applied to this year’s taxes; or if you made estimated tax payments, you could be due a refund. But in order to claim that refund, you’ll need to file a tax return.
2. Earned Income Tax Credit. Did you work and earn less than $51,567 last year? You could get the Earned Income Tax Credit (EITC) as a tax refund if you qualify. Families with qualifying children could be eligible for up to $6,044. To find out if you qualify, use the EITC Assistant tool from the IRS. You do? Great! Then you’ll need to file a tax return in order to claim it.
3. Additional Child Tax Credit. Taxpayers who have at least one child who qualifies for the Child Tax Credit – but don’t get the full credit amount – may qualify for the Additional Child Tax Credit. You should include a Schedule 8812, Child Tax Credit, with your income tax return.
4. American Opportunity Credit. Students – or taxpayers who support a student – may be eligible for the American Opportunity Credit. A student in the first four years of higher education could qualify for up to $2,500. Even if you don’t owe any tax, you could get up to $1,000 of the credit refunded for every eligible student you support. For the AOC, file Form 8863, Education Credits, with your tax return.
5. Health Coverage Tax Credit. Did you receive Trade Adjustment Assistance, Reemployment Trade Adjustment Assistance, Alternative Trade Adjustment Assistance or pension benefit payments from the Pension Benefit Guaranty Corporation? If you did, you could qualify for the Health Coverage Tax Credit. The HCTC helps make health insurance more affordable for you and your family, paying 75.5 percent of qualified health insurance premiums.

The bottom line? If you're eligible for any of these credits, you could qualify for a tax refund even if you don’t have to file otherwise. But to get that refund, you’ll need to file a return.