Earned Income Tax Credit

What Is The Earned Income Tax Credit?

The EITC is a tax benefit for working people who earn low or moderate incomes.

When you file a tax return, you may get a refund of federal taxes withheld. If you qualify, you may also get an additional cash refund, known as EITC.

How Much EITC Cash Can You Receive?

  • Single or married people WITHOUT CHILDREN may get up to $510 if your income is less than $15,010 if single, or $20,600 if married; OR,
  • If you have ONE CHILD, you may get up to $3,400 if your family income is less than $39,617 if single or $45,207 if married; OR,
  • If you have TWO CHILDREN, you may get up to $5,616 if your family income is less than $45,007 if single or $50,597 if married.
  • If you have THREE OR MORE CHILDREN, you may get up to $6,318 if your family income is less than $48,340 if single or $53,930 if married.

Who May Get EITC?

Any person who worked full-time or part-time during the year, and meets the following guidelines:
You Must Have Earned Income
Earned income is...

  • income from wages, tips and self-employment
  • includes long-term disability payments paid by the employer until you reach the minimum retirement age.

Earned income is NOT…

  • unemployment benefits, child support, Social Security benefits, pensions, retirement benefits, workers compensation benefits, alimony, welfare benefits, food stamps, job training benefits, and interest.
  • payments received from a disability insurance policy for which you paid the premiums.

You  Must File Single, “Married Filing Jointly” or “Head of Household”

  • You cannot file “married filing separately.”

You Cannot Have Investment Income

  • Investment income is interest, dividends, and rental income from personal property of more than $3,350.

You Must Be A US Citizen or Resident Alien

  • You are a resident alien if you have a “green card” or if you meet a residency requirement.
  • Nonresident aliens cannot claim EITC.

You May Be Eligible For More Money If You Have A Qualifying Child

  • A qualifying child includes your son, daughter, adopted child, stepchild, great-grandchild, or eligible foster child.
  • Brothers, sisters, step-siblings, as well as their descendants, are also qualifying children if they were cared for as members of the family.
  • A foster child may be eligible.
  • At the end of the tax year, your qualifying child must be under age 19 or a full-time student under age 24.
  • To be a full-time student, the child must be enrolled in school full-time for five months of the year.
  • A totally and permanently disabled child of any age also may be a qualifying child.
  • Your qualifying child must live with you in the United States for more than half the year.
  • In most cases, you do not have to claim your child as a dependent in order to qualify for EITC.

If You Have No Qualifying Child Then You Must Be Over The Age of 25 And Under Age 65.

You Must Have A Valid Social Security Number

Both you and your spouse must have valid Social Security Number(s).
Any child you claim for EITC (qualifying child) must also have a valid Social Security Number.  However, if you had a child that was born and died during the tax year, you do not need a Social Security Number for that child.
You can file an amended tax return to claim the EITC for prior years when you did not have a Social Security Number.

What If My Child Is The Qualifying Child of Someone Else?

  • Someone else, such as your mother or father, may be able to claim your child for EITC purposes.
  • Generally, when two people qualify to claim the same child for EITC purposes, you and the other person can decide who will claim the child.  However, if you CANNOT agree, the claim of the child’s parent takes precedence.
  • This rule may not apply to all cases.  You should consult with a tax advisor to find out if you can claim the child for EITC purposes.

Other Issues and Questions

Special Rules for Military Personnel

  • Nontaxable Combat Pay – You may elect to have your nontaxable combat pay included in your earned income.  If you choose to include your nontaxable combat pay in your earned income, you MUST include all of the nontaxable combat pay you received.
  • Military Personnel Stationed Outside of the U.S. – If you are stationed outside of the U.S. for extended active duty, then you are considered to have lived in the U.S. for that duty period.

Will EITC Affect My Public Benefits?
EITC will not affect your eligibility for certain benefits, such as food stamps, low-income housing, welfare and SSI.  However, if the EITC you receive is not spent within a certain period of time, it may count as an asset or resource and affect your eligibility for these benefits.

If you are denied public benefits or your amount decreases because of the EITC, you should call Community Legal Aid Services, Inc.

What If The IRS Denies My EITC Claim?
If you think that you qualify for EITC and the IRS denies your claim, contact Community Legal Aid Services, Inc. for assistance.  An appeal to the IRS explaining why you are qualified to claim EITC must be filed and documents that support your claim must be attached.

If you do not appeal the IRS decision, you may not be able to claim EITC for the next two years.  If the IRS determines that you fraudulently claimed EITC, you may not be able to claim EITC for the next 10 years! You must file Form 8862 with your tax return if the IRS previously denied your EITC.

Where Can I Learn More About EITC?
For more information on the EITC, see IRS Publication 596 available at www.irs.gov.

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This handout is meant to give you general information and not to give you specific legal advice. Prepared by Community Legal Aid Services, Inc. Updated June 2014.