ax Tip of the Week: What is Earned Income Tax Credit (EITC)

EITC is a benefit for working people who have low to moderate income. The tax credit part of the term, means more money in your pockets, reducing the amount of taxes you owe.

According to the IRS, in order to claim the EITC on your tax return, you must meet all of the following:
• You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment
• You must have earned income from working for someone else or owning or running a farm or business
• Your filing status cannot be married filing separately
• You must be a U.S. citizen or resident alien all year (If you are a nonresident alien married to a U.S. citizen or resident alien, see Publication 519, U.S. Tax Guide for Aliens)
• You cannot be a qualifying child of another person
• You cannot file Form 2555 or Form 2555 EZ (related to foreign earned income)
• You must meet the earned income, AGI and investment income limits (income limits change each year), see EITC Income Limits for the tax year amounts

And you must meet one of the following:
o Have a qualifying child (see who is a qualifying child below)
o If you do not have a qualifying child, you must:
o be age 25 but under 65 at the end of the year,
o live in the United States for more than half the year, and
o not qualify as a dependent of another person.

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