The Earned Income Tax Credit in 2014, or EITC (also known as EIC) is a credit designed for people who work and lower income families.
It is designed as an additional reward for work, so the words "earned income".
If you do not have children, you must earn relatively low incomes to qualify for the EITC.
2014, you must earn less than $ 14,50 to receive the EITC ($ 20,020 married filing jointly) if you have no qualifying children.
It is easier to qualify for the EITC if you have one or more children.
For example, if you have three or more children and is married to 2014, you may qualify for the EITC if you made less than $ 52,427.
How does the Earned Income Tax Credit?
EITC is based on the amount of household income gains.
If you receive the credit, you can get cash back as a refund even if you do not pay estimated taxes or have taxes withheld from your pay.
However, you must file a tax return to get the credit, even if you would not otherwise be required to file
The maximum credit amounts for 2014 are :.
- $ 6,143 with three or more qualifying
- $ 5,460 with two children of qualification
- $ 3,305 with one qualifying child
- 496 $ without eligible children
in the lower income levels, the more you earn, the more you receive EITC.
After a certain point, depending on the number of children living with you and if you are married, the amount of your credit declines until it is zero.
Can I claim the credit
2014, you may qualify for the EITC if all the following conditions are met :?
- you, your spouse if you are married and your children have Social Security numbers.
- You earn work income for yourself or as an employee.
- Do not use the Married filing separately filing status.
- You are a US or foreign citizen living all year, or a nonresident alien married to a US citizen or resident alien and filing a joint return.
- Someone else can claim you as a qualifying child for the EITC.
- you do not have the income earned abroad for which you are filing Form 2555 or 2555-EZ form.
- you do not have more than $ 3,350 in interest, dividends and other investment income.
- you are at least 25 but under 65 at the end of the year, you live in the US for more than half of the year, and you do not qualify as a dependent of another person. These requirements are not if you have at least one qualifying child
- Your earned income and adjusted gross income is within these limits :.
| Number of children living with you | maximum adjusted gross income and earned income |
|---|---|
| 0 | $ 14,50 ($ 20,020 married filing jointly) |
| 1 | $ 38,511 (43,941 groom $ filing jointly) |
| 2 | $ 43,756 ($ 49,186 married filing jointly) |
| 3 or more | $ 46.997 ($ 52.427 if the jointly married filing) |
What if I get combat pay in 'army?
If you get battle pay, special rules apply. You can choose whether to include combat pay in earned income.
Normally, you do not have to include wage battle in your earned income.
If you qualify for the EITC, however, excluding income combat pay can reduce the amount of EITC for which you qualify.
you may actually be better to count combat pay as earned income.
you must include all your combat pay or not in your earned income.
What are the children I ask for the EITC?
the number of children you credit demand is very important to ensure that you take your maximum credit.
the number of children you claim as dependents are not always the same number of children that qualify you for the EITC.
a child for the EITC must live with you for more than half of the year, regardless of who provides support for the child or taking the dependency exemption.
The noncustodial parent can never claim a child for EITC.
Each eligible child for the EITC must meet all four of these tests:
- age children should be 19 years old at the end of the year, or be a full-time student under. 24 If the child is permanently and totally disabled, he or she can be any age. Your child for the EITC must be younger than you and your spouse.
- relationship. A "child" for EITC may be your son, daughter, spouse, brother, sister, step-brother, step-brother, adopted child, adopted child or a descendant thereof.
- Residency. the child must have lived with you in the US for more than half the year. If you file a joint return, include the time lived with your spouse.
- common return. The child must not have produced a joint statement with his spouse, unless it was submitted to request a refund and he or she was not required to file a return.
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