The Earned Income Tax Credit (EITC) is a federal income tax credit for low and moderate income American families. General qualifications include having a valid social security number (this includes the qualifying child), earned income from employment (including self-employment), a United States citizen or resident alien all year or a nonresident alien who is married to a U.S. citizen. So why not take a couple of minutes to ensure you don't pass up a credit that might provide you with a nice refund check.
You can estimate your earned income tax credit
The EIC Earned income credit table can be helpful in estimating your credit amount. The person who files for the EIC cannot be the qualifying child of another person, cannot use the married filing separate status, and cannot file a form related to foreign earned income. Additional requirements include earned, investment and adjusted gross income meeting qualifying limits. If you would like an easy way to estimate your EIC amount you can use the earned income credit calculator to get an idea of how much money you can expect to receive.
EITC tax table for 2015, 2016 tax season
Credits range from $487 with no qualifying children to $6,044 with three or more qualifying children. In order to qualify, investment income must not exceed $3,200. The credits are as follows:
- $46,227 ($51,567 married filing jointly) with three or more qualifying children
- $43,038 ($48,378 married filing jointly) with two qualifying children
- $37,870 ($43,210 married filing jointly) with one qualifying child
- $14,340 ($19,680 married filing jointly) with no qualifying children
Tax year maximum credit:
- $6,044 with three or more qualifying children
- $5,372 with two qualifying children
- $3,250 with one qualifying child
- $487 with no qualifying children
The qualifying child must be related to the person filing by birth, marriage, adoption, or as a foster child. Furthermore, the child must be under 18 at the end of the year or a full-time student 23 or younger. If the filer is caring for a person who is considered permanently and totally disabled, the person can be claimed regardless of age. In order to avoid two people claiming the same child for the Earned Income Credit, the child must live with the person claiming them for a minimum of six months and a day. It is also important to note the taxpayer claiming a qualifying child (and their spouse if applicable) must be between the ages of 25 and 64 years old.
State tables may vary
Some states offer their own variation of an earned income credit. Qualifications and calculations are usually similar to the federal version. However, it is important to check with the individual state. The EIC Tax Table may vary each year and qualifications are subject to change. Currently, IRS publication 596 is used to give detailed information regarding qualifications. Schedule EIC is the actual form to fill out for filing for the federal earned income tax credit.
Help for those with families
The EITC is very important to tax payers who have a low or moderate income and large families. The reason is because this tax credit has helped millions get out of poverty yet the IRS still sees millions of qualified Americans not taking advantage of this tax credit. Those who claim it, probably find it unbelievable that someone would not claim this tax credit since families of three or more could get more than $6,000.
However, the reason tax payers are missing out on this credit is because they are newly qualified or they do not file taxes because their income does not require them to file. The Earned Income Tax Credit (EITC) is one of the refundable tax credits, which are available to low/moderate income families or those who are self-employed. The best part is, since this credit is refundable you can eliminate your tax liability and receive the remaining balance in the form of a refund. We encourage everyone who is eligible for this credit to take advantage of it.
File online with TurboTax and get your full credit
Filing your taxes online has never been easier than it is today by using tax software. If you would like the guarantee of claiming the entire earned income tax credit, you can use tax filing software such as, TurboTax to claim your full tax credit. You'll get step-by-step instructions through your taxes, expert help when you need it and every deduction and credit that applies to you. We make sure you get the biggest refund possible.