What Is The Earned Income Tax Credit?0 Comments
A tax credit of any sort is money that the IRS gives back to you when you file your taxes. The Earned Income Tax Credit is a common type of tax credit which may be claimed by (some) low-income people who work. You have to make a pretty marginal amount of money in order to claim the credit. It is often known simply by its abbreviation, EITC, and sometimes as EIC or Earned Income Credit. You can only get the credit if you file taxes, so even if you made so little money you know you will not owe taxes, you should still file. Otherwise you will miss out on the credit.
To claim the EITC, you must meet the following set of requirements:
- Have a social security number. If filing jointly, your spouse must have one as well.
- Have earned income. This may come from employment or from self-employment. Farm workers are eligible as well.
- Must not be married and filing separately.
- Must be a U.S. citizen or resident alien for the entire year, or you must be a nonresident alien who is married to a U.S. citizen or resident alien. If you are counting on your marriage to qualify, you must also be filing your return jointly with your spouse.
- You must not be a qualifying child that another person can claim as a dependent.
- You must not be filing either Form 2555 or Form 2555 EZ.
Furthermore, you must either have a qualifying child or be between the ages of 25 and 65 at the year’s end. If you do not have a qualifying child, you must also not qualify as a dependent for anyone else (child or relative), and you must inhabit the U.S. for more than half of the year.
EITC Income Limits
You also need to meet the income limits in order to qualify for the credit. If you exceed the limits, you will not receive Earned Income Credit. To give you an idea of what you can expect, the 2013 tax year income limit for a married couple filing jointly with no qualifying children is $14,340. The tax credit for a couple in that situation would be $487. For a married couple filing jointly with three or more qualifying children, the income limit is $46,227, and the applicable credit is $6,044. You can view all of the 2013 EITC income limits on the IRS website. Not sure if you have a qualifying child? Check the IRS qualifying child rules.