Earned Income Tax Credit FAQs

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Earned Income Tax Credit FAQs

1. What is the Earned Income Tax Credit (EITC)?

EITC is a tax credit for certain people who work and have low wages. A tax credit usually means more money in your pocket; it reduces the amount of tax you owe. The EITC may also give you a refund.

2. Who can claim the credit?

To claim the EITC on your tax return, you must meet all the following rules:

a. Must have a valid social security number

b. Must have earned income from employment or self-employment

c. Your filing status cannot be married, filing separately

d. Must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return

e. You cannot be a qualifying child of another person

f. If you do not have a qualifying child, you must :

- Be age 25 but under 65 at the end of the year

- Live in the U.S. for more than half of the year and

- Not qualify as a dependent of another person

g. Cannot file Form 2555 or 2555-E2 (related to foreign earned income)

3. Who is a qualifying child?

Your child is qualified if she/he meets all relationship, age, and residency requirements:

a. Under the age of 19 at the end of the year and younger than you or your spouse if you file a joint return

b. Full time student under 24 at end of year and younger than you or your spouse if you file a joint return or

c. Permanently and totally disabled at anytime during the year, regardless of age

d. Child must have lived with you in the U.S. for more than half of the year


4. EITC Income Limits and Maximum Credit Amounts
  • $45,060 ($50,270 married filing jointly) with three or more qualifying children
  • $41,952 ($47,162 married filing jointly) with two qualifying children
  • $36,920 ($42,130 married filing jointly) with one qualifying child
  • $13,980 ($19,190 married filing jointly) with no qualifying children


5. Tax year 2012 Maximum Credit

  • $5,891 with three or more qualifying children
  • $5,236 with two qualifying children
  • $3,169 with one qualifying child
  • $475 with no qualifying children

For more information, visit www.irs.gov.


 

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