A few of our stories and columns are now in front of the paywall. We at The Chief-Leader remain committed to independent reporting on labor and civil service. It's been our mission since 1897. You can have a hand in ensuring that our reporting remains relevant in the decades to come. Consider supporting The Chief, which you can do for as little as $3.20 a month.
The Earned Income Tax Credit (EITC) is a financial boost for married filing jointly taxpayers earning $49,622 or less a year. The IRS estimates that each year one in five eligible Americans misses out on money the government owes. Here are the top things the IRS wants you to know about this valuable credit, which makes the lives of working people a little easier.
If you qualify, the credit could be worth up to $6935 on the federal tax return. Additional refund amounts are available from the New York State and NYC taxing agencies. The amount of your EITC is based on your earned income and whether or not there are qualifying children in your household. Last year’s average credit was around $2,476.
As your financial, marital or parental situations change from year to year, you should review the EITC eligibility rules to determine whether you qualify. Just because you didn’t qualify last year doesn’t mean you won’t this year.
If you are eligible for the EITC, you must file a federal income-tax return and specifically claim the credit, even if you are not otherwise required to file. Remember to include Schedule EIC, Earned Income Credit, when you file your Form 1040.
You do not qualify for EITC if you are filing status is Married Filing Separately.
You must have a valid Social Security number. You, your spouse, and any qualifying children listed on Schedule EIC must have a valid SSN.
You must have earned income. You have earned income if you work for someone who pays you wages, you are self-employed or, in some cases, disability income.
Married couples and single people without children may also qualify. You must meet the age, income and residency requirements. Single taxpayers whose earned income is less than $16,480 with no children and married taxpayers’ at less than $22,610 with no children are eligible for the EITC. Income thresholds rise depending on your number of children.
Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay in earned income for the EITC.
If qualified, same-sex married couples are now eligible for claiming the earned-income credit.
For additional information, please refer to IRS Publication 596, "Earned Income Tax Credit (EITC)."
Caution: You cannot have more than $10,300 of investment income or you will lose the entire Earned Income Tax Credit. Investment income includes the following items: interest, dividends, income from rentals, royalties and net capital gains.
Barry Lisak is an IRS enrolled agent specializing in personal and small business taxes for 30 years. Any questions can be directed to him at 516-829-7283, or firstname.lastname@example.org.
We depend on the support of readers like you to help keep our publication strong and independent. Join us.
No comments on this item Please log in to comment by clicking here