You know when the IRS urges you to take advantage of a tax credit, you need to listen. So here’s the skinny.
The Earned Income Tax Credit (EITC) has been getting a lot of publicity lately. It is one of the IRS’ most valuable benefit programs, helping working class individuals and families receive a bigger tax return.
The eligibility for the EITC program is based on the number of eligible children, income, and filing status. The IRS states 4 out of 5 eligible taxpayers claimed EITC last year, adding an average of $2,200 to their tax return.
So who can claim the EITC on their taxes? People with:
- a valid social security number
- earned income from employment
- filing status’ other than married, filing separately
- qualifying children or if no qualifying children must be at least 25 years old but less than 65 years old at the end of the tax year.
So that means a lot of people are eligible. But wait there’s more…
There is also income limits. According to the IRS your earned income and adjusted gross income must be less than:
- $43,352 ($48,362 married filing jointly) with three or more qualifying children
- $40,363 ($45,373 married filing jointly) with two qualifying children
- $35,535 ($40,545 married filing jointly) with one qualifying child
- $13,460 ($18,470 married filing jointly) with no qualifying children
Also, with the signing of the American Recovery and Reinvestment Act there is a temporary increase in the EITC benefits that apply to the 2009 and 2010 tax years.
For more information and to see if you qualify, go to the IRS website to answer a series of simple questions that takes 15-20 minutes.
**Note: Have your W2(s) handy.