The Earned Income Tax Credit 4/24/2010
What is the Earned Income Tax Credit?
The Earned Income Tax Credit is a tax break for people who work but do not earn high incomes. The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit. To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.
What are the qualifications for the EITC?
- Must have a valid Social Security Number
- Must be a low wage earner
- You must have earned income from employment or from self-employment
- 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
- If you do not have a qualifying child, you must: be age 25 but under 65 at the end of the year
- live in the United States for more than half the year
- not qualify as a dependent of another person
- Cannot file Form 2555 or 2555-EZ
- You must meet the EITC Thresholds and Limitations
- Special rules may apply
There is an online EITC assistant where you can answer a few questions to see if you qualify. Go to: www.irs.gov/individuals
Can I get more information about the EITC?
If you need more information than what is available online, the IRS does have a toll-free tax help line. Dial 1-800-829-1040 for individual tax questions.
How can I file for the EITC?
You file for the EITC when you file your yearly tax return. Even if you did not earn enough money to be obligated to file a tax return, you may still want to file to receive the tax credit. During the normal tax filing season, January through April, there is free tax filing help available for low income individuals and families. Call the 2-1-1 Idaho CareLine to locate a free tax help site in your area. Dial 2-1-1 or 1-800-926-2588.