There’s some big news about the 2009 EITC (Earned Income Tax Credit).
What’s EITC? The EITC is a a refundable federal income tax credit specifically designed to assist low to moderate income individuals and their families make ends meet. You do not have to have a child to qualify for EITC, but you must have worked at some point during the year. The amount of the credit also goes up the more dependent children you have.
Here’s the big news.
Last year, the maximum EITC credit tables looked like this:
- 0 children/Earned Income less than $12,880 = $438 maximum credit
- 1 child/Earned income less than $33,995 = $2,917 maximum credit
- 2 or more children/Earned income less than $38,646 = $38,646
For tax year 2009, the credit and dependent allowances have increased! So, if you have 3 or more children, you qualify for an even larger tax credit (no more two-child credit cap). The tax credit limit for individuals with no children has also been increased, as has the earned income limit.
Here’s how the 2009 credit works out:
- 0 children/Earned income less than $13,440 = $457 maximum credit
- 1 child/Earned income less than $35,463 = $3,043 maximum credit
- 2 children/Earned income less than $40,295 = $5,028 maximum credit
- 3 or more children/Earned income less than $43,281 = $5,657 maximum credit!
That’s right. If you have three or more dependent children and have an earned income of less than $43,281, you could qualify for a maximum credit of $5,657 this year.
Want to know for sure? Click here to visit the IRS EITC Assistant to see if you qualify (note that the 2009 EITC Assistant is not available on this website yet!).
If you still have questions, visit your local tax preparation service for more information.
This entry was posted on Friday, October 23rd, 2009 at 11:00 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.
