What is the Earned Income Tax Credit? Do I Qualify?

What is the Earned Income Tax Credit? Do I Qualify?

The Earned Income Tax Credit (EIC or EITC) is a refundable credit for workers who earn low or moderate incomes. This credit is meant to supplement the income you have earned through working, whether for yourself or for someone else. As a result, if you qualify for the Earned Income Tax Credit, you can reduce your taxes and increase your tax refund. The EITC allows more working people and their families to keep more of their hard-earned money.

The EITC is for earned income only and there are income limits that are adjusted every year, so even if you didn’t qualify for the EITC in the past, you may be able to claim it this year.

EITC Qualifications Earned Income Tax Credit, people, house, apartment, sitting around, carpet

1 out of 5 people who qualify for the EITC don’t claim it on their tax returns. Those people most in danger of missing out on their Earned Income Tax Credit include:

  • self-employed
  • people living in rural areas
  • grandparents raising their grandchildren
  • recently divorced
  • recently unemployed
  • taxpayers with no children
  • recipients of disability benefits

Don’t let this happen to you! When you book your appointment, we will automatically check to see if you qualify for the EITC, calculate the amount of your credit, and fill out the right forms for you to claim it.

Remember: even if you don’t owe income tax, you could still get the EITC as a tax refund, but you have to file a return to claim it.

Other Requirements You Also Must Meet:

  • You, your spouse if married filing jointly, and any qualifying children you claim must each have a valid Social Security Number.
  • You must have earned income (from employment or self-employment).
  • Your filing status cannot be married filing separately.
  • You must be a U.S. citizen or resident alien for the whole year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
  • You cannot be the Qualifying Child (for the Earned Income Credit) of another person.
  • Your qualifying child for the EITC cannot be used by more than one person to claim the EITC.
  • If you do not have a qualifying child, you must:
    • be at least 25 but younger than 65 at the end of the tax year
    • live in the United States for more than half the year
    • not be the qualifying child of another person.

Special Note for Single Workers with No Children: Single filers with no dependents are believed by the IRS to be the largest group of qualifying taxpayers who do not claim the EITC on their tax returns. Please do not fall into this trap! Even if you are not married and/or have no children, you may still be able to claim the credit. You qualify for the EITC as long as you were at least 25 but younger than 65 on Dec. 31 of the tax year, you earned income through work. Therefore, you met the income limits specified above. 

How to Claim the EITC

Jeffrey Schneider EA, CTRS, NTPIF can check to see if you qualify for the Earned Income Tax Credit.

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Jeffrey Schneider, EA, CTRS, NTPI Fellow has the knowledge and expertise to help you reach a favorable outcome with the IRS. He is the head honcho at SFS Tax & Accounting as well as an Enrolled Agent, a Certified Tax Resolution Specialist and Advanced Crypto Tax Expert.
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Author of the series Now What? Help! Jeff defines and deconstructs IRS notices and clarifies the letters and actions the IRS will take to get what they want. He interprets the world of the IRS in a fashion that mixes attention to detail with humor to help you better understand and resolve your tax problems.

The books are available in paperback and eBook on Amazon.

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