If you are a low-income taxpayer, the Earned Income Tax Credit (EITC) can actually increase the dollar amount of your refund. Unlike other tax credits that simply lower your overall tax liability, the EITC actually puts more money where you need it most…in your pocket.
In order to qualify for the EITC, your income must be at or less than the following, based on your filing status and number of qualifying children living with you in 2015:
- Single, Head of Household or Widowed: No kids: $14820.00; 1 child: $39131.00; 2 children: $44464.00; 3 or more: $47747.00
- Married, filing jointly: No kids: $20330.00; 1 child: $44651; 2 children: $49974.00, 3 or more children: $53267.00
2015 Maximum Credit Limits
- No children: $503.00
- 1 Child: $3359.00
- 2 children: $5548.00
- 3 or more children: $6242.00
As with any tax credit, the IRS has strict requirements. You must:
- File a joint return if you are married
- Earn income from a job
- Be between the ages of 18-65 if you have no qualifying children
- Be a US citizen or tax-paying expatriate
- Have a qualifying child if your income is above a certain threshold. For EITC purposes, a qualifying child must live with you and receive financial support from you for more than half the year, be a legal relative, be younger than 19 or younger than 24 by the end of the tax year if they are a full-time student.
Claiming The Credit
In order to claim the credit, you will need to complete the Schedule EIC (Earned Income Credit) and list each qualifying child by name, birthdate, relationships to you, and their social security numbers. IRS Publication 596 has tables that you can use to figure your exact credit.
You’ll then transfer that information on to your 1040 tax form on the line that reads “Earned Income Tax Credit”
If you are a low-income taxpayer, the EIC can be a useful tax credit. Instead of just lowering your overall tax liability, the EIC can actually increase the dollar amount of your tax refund, which can help with paying bills and other expenses.
If you’re not sure if you qualify for the EIC, a qualified tax prep specialist can help you. Community groups such as VITA offer low-to-no-cost tax prep services for low-income families and seniors, making tax prep services accessible to all taxpayers.
You can also contact us be clicking the white “Start Chat” button on any of our webpages. We have qualified tax prep specialists on staff to assist you.