Do you qualify for the Earned Income Tax Credit, or EITC? The EITC can make a BIG difference in your refund amount this year. It could be worth up to $5,657!
Here are some tips from the IRS on how to know if you qualify for the Earned Income Tax Credit (EITC).
1) Even if you didn’t qualify for the EITC last year, you should look into again this year (again: it’s worth big money!). Any time your financial, marital, or dependent situation changes, your eligibility for the credit may change as well. Check out the EITC rules every year just to make sure. You can use the IRS’s EITC assistant to see if you may be eligible, or visit your local tax preparer. They should be able to answer all your questions if you find the rules a little confusing.
2) In order to qualify for the EITC, you must actually file a federal tax return! Even if you’re not required to file a tax return because you do not meet the income threshold for your filing status, you will not receive the amount of the credit unless you file a tax return and claim the credit. So file a tax return… and file early!
3) Note that in order to claim the credit, your filing status cannot be Married Filing Separately, and you MUST have a valid Social Security Number. You and your spouse (if filing jointly) and any qualifying dependents that you claim must also have valid Social Security Numbers in order to receive the EITC.
4) You may not have made a lot of money last year, but you must have earned something in order to qualify for the credit. Earned income comes from someone who pays you wages or – if you’re self-employed – income you receive from contracting your services to others. In some cases, disability income may also allow you to qualify for the EITC.
5) There are also special rules for the U.S. military deployed in combat zones. Military members can include nontaxable combat pay as earned income for the EITC. Good news: even if you elect to do this, the combat pay is still not taxable!
Again, if you have any questions about whether or not you qualify, check out the online EITC Assistant. Be sure you claim all the credits you qualify for and get back the money you’re owed. If you qualify this year, you could be getting back a bundle!
Tags: Tax Tips
This entry was posted on Thursday, February 4th, 2010 at 8:28 AM and is filed under Tax News. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
