The Earned Income Tax Credit, also known as the EIC and EITC, is a tax credit for individuals who only make an annual income that is considered low or moderate. Your filing status and your income determine the amount of the credit.
If you are able to qualify for the credit your federal taxes will be lower and you may get a nice tax refund. However, to qualify you have to file a tax return even if you are not legally required to do so.
General EIC Requirements
- Your income must be within the EITC income limits
- You and your qualified dependents have to have a social security number that is valid
- You cannot file with the filing status married filing separately
- Your investment income cannot exceed $3,300
- You have to be a citizen/resident alien for the entire year
- Your earned income has to come from self-employment or employment.
If you file your taxes online, they will help you to claim the earned income credit based on the information that you enter into the system
Claiming the EIC If You Do Not Have Dependents
In the event that you do not have any dependents you may still be eligible for the credit. Those who have dependents will receive more; however, some people qualify without dependents.
Which Dependents Qualify?
The IRS uses qualifying children when it comes to determining the amount you will receive for the credit. In order for a child to be considered a qualifying child for this tax credit they must be a relative, have a social security number and meet the age, residency, and relationship criteria’s.
This means they have to be your son, daughter, foster child, step brother/sister, adopted child, or a descendent from them. In addition, they have to be under the age of 19 unless they are a student then they have to be under the age of 24.
If the child is disabled, there is no age limit. Furthermore, you cannot claim more than three qualifying children.
Are There Age Limits Regarding EIC Eligibility
If you and your spouse file married filing jointly, you can qualify as long as you are over 25 and under 65 if you do not have any qualifying children. If you have a qualifying child, there is no age limit.
Keep in mind that if you file your taxes online you only have to answer a few simply questions to see whether you can claim the earned income credit. This means that you will not have to know the current tax laws and you will be able to receive your maximum tax refund.