The tax credit earned income, or EITC is a tax credit to help low to moderate - people working and couples with income go ahead and put more money in their pockets. It can give a strong boost to your income tax refund each year if you meet certain criteria.
For example, if you are employed, but your earnings fall into what the IRS considers a lower level of income based on the size of your family, you may be eligible for the credit.
The maximum EITC credit available in 2015 is $ 6,242.
the best way to determine your EITC is enter your information in TaxAct, which will automatically calculate the credit based on information in your statement.
Here are some questions and answers about the EITC.
1. Do I qualify for the EITC even if I have no income tax withheld and I am not required to file a tax return?
Yes! Thank you for the EITC, you can get money back even if you do not have income tax withheld or pay tax on the estimated income. This type of tax benefit is called a refundable credit.
But you should file a tax return to qualify for the credit, even if you otherwise would not need to file.
2. Do I earn very little income to claim the tax credit for earned income?
If you have no qualifying children, you must earn relatively low incomes to qualify for the EITC. In 2015, for example, you must earn less than $ 14,820 to meet the credit requirements ($ 20,330 for married filing together) if you have no qualifying children.
But 39131 if you just have a qualifying child and make $ or less, you may be surprised to find you qualify for the EITC.
3. Who is eligible for the tax credit on earned income
You must meet the following requirements to claim the credit for 2015 :?
- Your earned income and adjusted gross income falls within these limits:
| Number of Children living with you | maximum adjusted gross income and earned income |
| 0 | $ 14,820 ($ 20,330 married filing jointly) |
| 1 | $ 39,131 (44,651 married filing jointly) |
| 2 | $ 44,454 (married 49,974 filing jointly) |
| 3 or more | $ 47,747 ($ 53,267 if married filing jointly) |
- you (and your spouse if married) and your children have social security numbers.
- You earn income either working for yourself or as an employee.
- Do not use the Married filing separately filing status.
- You are a US citizen or resident alien all year, 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 that you must file Form 2555 or Form 2555 EZ.
- you do not have more than $ 3,400 in interest, dividends and other investment income.
- If you do not have a qualifying child, you must:
- Be between the ages of 25 and 65 at the end of
- have lived the United States for more than half of the year
- Do not be eligible child of another person
4. Does military combat wage affect my credit?
If you receive wages battle, you can choose whether or not to include it in your taxable income.
Normally, combat pay is not included in your taxable income. However, depending on your income earned in total family size and outside combat result from your taxable income could reduce the amount of the EITC for which you qualify. You may be better to count combat pay as taxable income in these cases.
But remember, this decision is all or nothing. You must include all of your combat pay or none of this in your taxable income.
5. Tax Credit Income Can I have my Earned added to my salary throughout the year?
In recent years, the IRS permits taxpayers to receive the Advance Earned Credit income throughout the year. However, in 2010 it was repealed and is no longer available.
6. Can I claim the tax credit on earned income, even if the other parent of my child wants him as a dependent?
If your child lived with you for more than half of the year, you usually take the EITC on the basis of the child, regardless of who takes the dependency exemption.
the number of children you claim as dependents are not always the same number of children that qualify you for the EITC. If the time is equal, the parent with the higher adjusted gross income takes the credit.
Only one person can claim the same child. Non-custodial parents to freedom can not ask children for the EITC
Your qualifying child for the EITC must meet the following requirements: ..
- age or disability at the end of the reporting year, the child is under 19, or under 24 and a full-time student for at least 5 months of the year. The child must be younger than you (or your spouse if you file a joint return.) He or she can be any age if permanently and totally disabled.
- Link with you. a child for the EITC can be your son, daughter, spouse, brother, sister, step-brother, step-brother, adopted child, adopted child or a descendant thereof.
- the child must have lived with you in the United States more than half of the year. If you file a joint return, you can include the time that the child lived with your spouse.
- No joint statement. Your child should not have produced a joint statement with his spouse, unless it has been filed to claim a refund and he or she was not required to file a return.
7. I would have claimed the tax credit on income earned in previous years, but I have not. Can I go back and claim the credit now?
If you filed your taxes a year earlier, but did not claim the EITC, you can file an amended return and receive the associated credit.
If you do not get the credit because you do not produce, or because you did not know you could ask a child who was living with you, you must file a separate return for each year you qualified.
However, you can not go on indefinitely. You can generally only an amended return for the past three years. Use TaxAct to file Form 1040X, Amended US individual income statement .
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