Earned income tax credits: What are they and how do I qualify?
Stop leaving money on the table see if you qualify for Earned Income Tax Credits.
Did you know, according to the Institute on Taxation and Economic Policy, that 28 percent of all workers in the United States earned poverty-level wages or below in 2011? Did you also know that because of this, the U.S. had the highest proportion of working poor in developed countries? So, if wages are low and not rapidly growing, how do you keep up with rising food, housing, child care and other costs? One way the federal government helps is through Earned Income Tax Credits (EITC).
What are Earned Income Tax Credits? According to the Internal Revenue Service (IRS), EITC is a benefit for working people who have low to moderate income. It reduces the amount of tax you owe and may give you a refund.
How do you qualify and how do you get EITC? In order to claim EITC you must meet the following guidelines per the IRS :
- Have a valid social security number
- Must have operated/run a farm or business, or have worked for someone.
- Cannot file married filing separately
- You have to be a Citizen of the U.S. or a resident alien all year, or married to a U.S. citizen or resident alien
- You cannot be a qualifying child on someone else’s taxes
- You cannot file forms 2555 or 2555EZ
- You must meet one of the following:
- Have a qualifying child
- If you don’t have a qualifying child:
- You must be 25 years old but under 65 years old by the end of the year, and
- Not qualify as a dependent for someone else
- You must fall within the earned income, adjusted gross income, and investment income limits for the tax year.
What are the Earned Income and Investment Income Limits for tax year 2014?
- $46,997 ($52,427 married filing jointly) 3 or more qualifying children
- $43,756 ($49,186 married filing jointly) 2 or more qualifying children
- $38,511 ($43,941 married filing jointly) 1 or more qualifying children
- $14,590 ($20,020 married filing jointly) no qualifying children
It is very important to note: Even if you are not required to file or you owe no tax, if you qualify for the Earned Income Tax Credit you must file a tax return with the IRS to receive your benefits.
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