NEW YORK — Millions of low-income workers reduce their tax bills each year by taking advantage of the earned income tax credit. But many who are eligible for the credit aren't participating in this anti-poverty program.

"We've really stepped up our outreach on this," said Jordan Ash of the nonprofit ACORN community organizations group. "There are millions of people missing out on billions of dollars. It's money they're entitled to and they can use."

The earned income tax credit, or EITC, was created in the mid-1970s to encourage families to reduce their dependence on welfare programs. It's unlike most other credits in the IRS code because it's refundable, which means taxpayers can use the credit of up to $4,400 to offset any taxes they owe and still get a cash refund for the excess.

The IRS said 21.1 million taxpayers claimed some $39 billion in earned income tax credits in 2004. But studies by the Government Accountability Office and the Internal Revenue Service indicate that 15 percent to 25 percent of eligible taxpayers aren't applying for it.

Mark Luscombe, principal tax analyst at CCH Inc. of Riverwoods, Ill., which provides tax information and services to tax professionals, said some taxpayers may be overwhelmed by the complexity of claiming the EITC.

"It's one thing to have stuff that's complicated for wealthy taxpayers, who can afford to pay for preparation services," Luscombe said. "But to have it this complicated for lower-income taxpayers, that's a real problem."

Taxpayers must have valid Social Security numbers for themselves and their children. A family qualifies if any of the children, including stepchildren and foster children, lived with the taxpayer for more than half the year.

The "age test" requires that live-at-home children be younger than 19 and full-time students be younger than 24; totally disabled children of any age also qualify.

The maximum credits are $4,400 for taxpayers with two or more children, $2,662 for those with one child and $399 for those with no children.

This year, there are special rules for victims of Hurricane Katrina, Luscombe said. Under the legislation, Katrina victims will have to report the income they earned in 2005, but they will be able to calculate the EITC using either 2004 income figures or 2005 income figures, whichever results in a higher payout, he said.

Leslie Tarbert, a teacher's assistant with the Early Head Start program in Kansas City, Mo., said the tax credit provided a real financial boost for her family.

"It's awesome," she said. "For me, as a single parent, it's very helpful."

Tarbert, mother of two girls, said she used her credit last year as part of the down payment on a home.

"This year with the money, I'm paying my daughter's braces off," Tarbert said. "I also have to buy siding for one side of my house, and maybe think about putting gutters on."

Kathy Burlison, director of tax implementation for H&R Block Inc., which prepared Tarbert's tax return, said the irony is that many low-income people "have basically simple returns — except for the complexity of the EITC."

Many of these people also qualify for the additional child tax credit, which can result in refunds for some low-income families' childcare costs, as well as state and local earned income tax credits.