The tax credit you may not be aware of -- do you qualify?
Filed under: Tax, Tax - Credit
In late January, the IRS and Treasury Department organized EITC Awareness Day to highlight the availability of the tax credit. According to the IRS, nearly 24 million people took advantage of the Earned Income Tax Credit last year, receiving nearly $50 billion in benefits.Just because EITC Awareness Day has passed doesn't mean the IRS will cease its efforts to promote the credit. To assist EITC taxpayers, 167 IRS assistance centers will offer Saturday service on February 20. Click here to find a center near you.
Eligibility for the EITC depends on a number of factors, including:
- You must have a valid Social Security Number (an Individual Taxpayer Identification Number (ITIN) is not sufficient).
- Your filing status cannot be married, filing separately.
- You 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.
- You cannot be a qualifying child of another person.
- You must not have filed a form 2555 or 2555-EZ (related to foreign income).
- $43,279 ($48,279 for married filing jointly) if you have three or more qualifying children,
- $40,295 ($45,295 for married filing jointly) if you have two qualifying children,
- $35,463 ($40,463 for married filing jointly) if you have one qualifying child, or
- $13,440 ($18,440 for married filing jointly) if you do not have a qualifying child.
- $5,657 with three or more qualifying children
- $5,028 with two qualifying children
- $3,043 with one qualifying child
- $457 with no qualifying children
Since the credit can be confusing, many taxpayers fail to claim the EITC. This usually happens because the taxpayers file a return without understanding that they may qualify for the credit or because they don't file a return at all. Taxpayers must file a tax return to claim the EITC.
Those who tend to assume they won't qualify include workers without qualifying children; people whose earned income falls below the threshold required to file a tax return; people with disabilities; and nontraditional families, such as grandparents raising grandchildren. To help taxpayers determine whether they are eligible for the credit, the IRS has developed an online assistant. The assistant walks you through a set of questions to figure out whether you might qualify for the credit.
Free help is available for taxpayers who may need filing assistance. The IRS strongly suggests you use one of their free service centers or a reputable preparer to help you calculate the credit.
Finally, don't assume the EITC is restricted to federal income tax. For 2009, 21 states offer some form of EITC, including New Jersey, New York and Virginia. Those credits are linked to the federal version of the EITC and offer a percentage as a credit on your state income tax return. In many cases, the credit is refundable, meaning you can receive a credit even if you owe no state income tax.
Don't miss out on the opportunity to claim credits, such as the EITC, for which you qualify. It can reduce your tax bill significantly -- you may even get a refund.
Getty Images
- YUM: Where to Find the Best Airport Food - Forbes
- LIST: America's Most Efficiently Run Brands - 24/7 Wall St.
- BEWARE: New Credit-Card Tricks Snare Consumers - MarketWatch
- HOTTEST GADGETRY: 20 Back-to-School Devices - TIME.com
- TOXIC: Three Mutual Fund Warning Signs - InvestorPlace
- FLAME-OUT: What Went Wrong at Burger King - FORTUNE
- PONY UP: Most Expensive College Football Tickets - CNBC
Reader Comments (Page 1 of 6)
2-02-2010 @ 12:28AM
dan said...
does pension $ qualify?
Reply
2-03-2010 @ 10:32AM
Manuela S. said...
Also, you must have earned income from an employer or self-employed income. It's a worker rebate, credit so pension would not qualify.
2-09-2010 @ 8:44AM
anshizhenai said...
I'm male, 26, and just this Christmas had a brief encounter with a mature woman. It was wonderful. We met via internet dating on this site:
A g eL e s s M i ng l e .C 0 M a good way to meet like-minded people, and she actually approached me first. It just so happens I like older women and she likes men around my age. We had an amazing day and later on she joined me at a hotel. It was like a fantasy come true. Amazing company, amazing sex too and a really warm and loving woman. She will turn 36 this month, and my goodness what a connection we had that day.
2-09-2010 @ 8:50AM
bobgreas said...
I want to tell you my first-hand experience.I have found my best friend and my true Love.
I have found my match on this site,
~~~~~Mill ionaire Chats . C o m ~~~ It was an instant connection for rich man seeking woman and where you have the opportunity dreaming about dating a m illionaire or sexy girl and make it come true!
i hope u would love it
I want to tell you my first-hand experience.I have found my best friend and my true Love.
I have found my match on this site,
~~~~~Mill ionaire Chats . C o m ~~~ It was an instant connection for rich man seeking woman and where you have the opportunity dreaming about dating a m illionaire or sexy girl and make it come true!
i hope u would love it
yyyyyyyyyyyyyyyeeeeeeeeeeeeeeeeeeqqqqqqqqqqqqqqqqq
2-09-2010 @ 9:16AM
bill said...
If anyone's interested in working online,You might want to try this
site
blackdiamondred.ws
2-02-2010 @ 12:29AM
Rich said...
Getting more back than was paid in is basically another form of welfare
Reply
2-03-2010 @ 11:47AM
Gayle Adcock said...
Not being adequately paid for one's work in America is basicly slavery. This is just a crumb.
2-03-2010 @ 2:19PM
G said...
Perhaps, but it's "voluntary slavery" ... last time I checked Free Enterprise was still available as an option ... although sadly very few native-born Americans even know what it really is.
Let's face it ... the only person who will pay you what you think you're worth is ... YOU!
Of course, you'll need to provide some product or perform some service for others that they are gladly willing to pay you for ...
Attending a j-o-b and collecting a salary is only going to pay you what the J-O-B is worth ...
2-03-2010 @ 3:56PM
Manuela S. said...
If you agree to being paid a substandard wage for what you feel you are worth, then it's not slavery unless you consider yourself a slave to your stupidity.
2-09-2010 @ 9:16AM
Guy said...
People are paid what they are worth... If you wish to be paid more, then you need to make yourself more valuable to your employer by improving your skills. If you believe you're "underpaid," you only have yourself to blame!
This is nothing more than another glorified welfare program - just like the free cell phones the so called poor now get from the federal government. All of this needs to end!
2-09-2010 @ 9:41AM
Julie said...
Actually it is the government saying thank you for working and not sucking up all the welfare. As a single mother in the 90's I received EIC and was very thankful since I worked and made too much money to qualify for any other type of assistance.
2-02-2010 @ 12:29AM
kevin said...
you must also be at least 25 years old.
Reply
2-02-2010 @ 12:52AM
Becky said...
I think it sucks you don't qualify if your on Unemployment. It's not our fault the ECONOMY sucks and there is no jobs out there. So I didn't qualify for the Earned Income Credit for being unemployed. VERY UNFAIR OBAMA!
Reply
2-02-2010 @ 1:15AM
Mena said...
@Becky: what does the President have to do w/ any of this? Yes, he has approved legislation to extend certain credits and whatnot but if the legislation isn't put forth he can't do anything about it. If you want to complain about how unfair it is that those of us that are unemployed don't qualify for the credit, complain to and be disappointed in you Congressmen/Congresswomen. Also, look at the name of the credit-it's the EARNED Income Tax Credit so in the name alone it implies that it only applies to money you have EARNED. Unemployment isn't earned-you're getting back money that you paid into an insurance-type system. Speaking of which, the President DID sign off on legislation EXTENDING unemployment benefits not once, but twice, and also added an extra $25.00 to everyone's unemployment check weekly. If you ask me, President Obama has done a fair amount for the unemployed especially considering that the Republicans have fought him the entire way on extending benefits and increasing unemployment payouts. Of course, he could do more but in this particular instance your complaint/issue is completely unfounded and unwarranted
2-02-2010 @ 1:58AM
Sherry said...
It's called EARNED income credit. Also, this is nothing new. Earned income credit has been a type of credit when filing taxes since the seventies ...yes, since the (70's)!!!!!!! You should try to inform yourself before blaming someone..especially in an instance such as this. You've got BOTH feet in your mouth..along with..well, nevermind. Just thought you should know before you make any more completely uninformed statements! Have a better day, and good luck looking for a job, sincerely.
2-03-2010 @ 2:54PM
kym said...
you realize it was like that before Obama... i hope...
2-09-2010 @ 1:37PM
Moderate Independent said...
It has nothing to do with Obama it has to do with the Internal Revenue Service under all Presidents.
2-09-2010 @ 9:14AM
Denise said...
You forgot Bush was in office just before the storm. So lets get facts correct. Its not Obama. Things were going down hill and are now starting to up stream.
2-09-2010 @ 10:06AM
Jay said...
There are jobs out there. Just suck it up and go to work. You may not like the job but who does. Stop making everyone else pay for your unemployment/lazy life.
2-09-2010 @ 4:27PM
Ab said...
EITC is only for tax payers that work for their income. Waiting around for a check to come in the mail is not consider work and should not be compansate it. If you really want a job, make yourself marketable.