Earned Income Credit Michigan

[rilbrianne]

Hello,
I've asked this question before and have searched so I'm sorry to post it again but I have yet to get an answer. I understand that approximately 7/12's of my tax refund coming up in 2008 will go to the trustee because it's our only asset and the approximate amount will be $3000-4000. So after the trustee finds nothing else to sell, I'm sure they will wait to get this...which is fine.

I NEED TO KNOW IF THE EARNED INCOME CREDIT IS EXEMPT AS "PUBLIC/SOCIAL WELFARE". I want to make sure I list it as an exemption if it qualifies because I can't afford to lose it too. I'm in Michigan by the way.

I've searched all over the web for information and have called but not been able to speak directly with an attorney thus far. Any information or guidance is GREATLY appreciated.

[freshstart06]

I don't know but what I do know and heard is that they don't take the entire income tax return, in your case they may not even ask for it.

I use to live in Ann Arbor, MI. We left it is really bad out there now, they should ask for a state of emergency LOL> But really it is so bad out there that some lenders refuse to do the Detroit metro area, the housing marketing is dropping every 3 months in most areas.

[whatamess]

When will you file? I was under the impression they only went after your return if you filed during tax season (late winter or spring) or late in the year.

Gosh I hope I'm right...I hate that circling vulture feeling, like you'll be picked clean.
Did anyone say during your free consults?
WAM

[freshstart06]

whatamess, I heard that as well. In my case we owe to much in taxes they will have to wait in line behind the IRS LOL.

[rilbrianne]

We will probably be filing within the next few days. I was just doing last minute touch ups to the paperwork, you know... when you have to have exact amounts of cash on hand and bank accounts. I was going over my exemptions, which should be fairly easy, lol, since there really isn't anything to claim exempt.

I hate that they could take most of my refund anyway but I hoped the earned income tax credit would be considered a "welfare benefit" since it is for low income working families.

No, they didn't say anything about it when I got free consults... which weren't really helpful anyway. I never got to speak to an attorney, they all gave me secretaries or assistants to talk to... I can't seem to get any help unless I've paid the 1500 to secure their services Which I'm not going to do. You know, if they take my EITC, then there isn't anything I can do but I'm hoping to find out that they CAN'T!!!

[JollyGG]

Trustee's typically are interested in tax returns in the spring when you just got it or are expecting it or at the end of the year when they can go after most of your return for the year.
Filing in the middle of the year your trustee may not even ask for it.
If they do, you need to increase your number of dependents on your W2 as high as you can so you will get the smallest refund. Better for you to have that money every month than for the trustee to have it in the spring. Here is a witholding calculator that can help you adjust your witholdings to get as near $0 for a tax return as possible http://www.irs.gov/individuals/artic...=96196,00.html

[rilbrianne]

I tried this and just for future reference, I am going to change my husband's W-4 and instead of claiming "0" allowances on line 5, I'm going to claim 4. So they will hopefully take more out but not too much. We'll see what happens. I don't work by the way, stay at home with the babes

I guess I'll just claim the EITC as an exemption under welfare benefits and hope it flies. I thought if I didn't bring it up, the trustee wouldn't even think about my tax refund. But If I list it as an exemption, they will say "oh yeah, we can take their tax refund!".

[whatamess]

My husband claims me & the two kiddies as I stay home with them on the income tax return form.
Because of this, tons are taken out but we get a huge refund, like about $5,000 every year. Last year we just missed the EIC by, no lie
$10.
$10 lousy dollars!!!

Anyhow, we signed going on three weeks ago and its still not filed. It was supposed to be filed last week. I guess it would be a bad thing to go change deductions now? I doubt the trustee would like it very much. Probably to late.

And that just stanks!
WAM

[rilbrianne]

Well, I worked at the beginning of the year but we have a new babe so now I stay home. So I do have about 1 1/2 months worth to file taxes on. My husband only makes about 18,000/year now. Last year in Florida, we made a lot more and missed the EIC by a little less than $1000.

I don't think it would matter. You "never know" what your refund will be wink, wink. Besides, if you change it, there really isn't anything they can do about it. Also, remember that there will be extra income in the month that may have to be reported. So it kind of depends on how much you make now and if a little extra would throw you over for having extra "dispensable" income each month...

Good Luck, I'm hopefully filing in the next few days. God, help us all!!

[rilbrianne]

Hello again... I just received a callback from an attorney and he said he's never claimed it for his clients. He asked if it was a ch. 7 and I said it is. He said they won't keep it open for that. He said that usually the trustee will ask if your expecting one back if you file sometime around Feb or March but at this time of year, I shouldn't even worry about it. He said "I wouldn't claim it if I were you and if you do decide to, you'd have to claim it under the wild card exemption". FYI, Michigan has no wild card so I'd have to use Federal exemption scheme but that info is just for anyone who may be in my situation looking for advice.

So, I'm not going to worry about it. I'll keep everyone updated on what happens when I file and have my 341. Thanks everyone!!!