How to Get the 2008 Earned Income Credit

The earned income tax credit is a refundable credit that began in 1975 as an incentive for moderate to low income taxpayers to work. The term refundable credit means that it not only reduces your tax liability, but you can be eligible for a refund greater than the amount you paid in taxes in 2008. The amount of the credit is determined by how much a person earns, filing status, and whether they have qualifying dependents in the home. The minimum and maximum amounts a taxpayer can earn and still qualify for earned income credit changes each year. Also, the amount paid to taxpayers who qualify changes each year for inflation. The 2008 qualification guidelines for earned income credit are below.

Difficulty: Easy

Instructions

1. The largest group of eligible taxpayers that are not claiming the earned income tax credit are single taxpayers with no children. Many people believe earned income is only for taxpayers with children. This is not the case. If you do not have children, you may still be eligible for earned income credit. To be eligible for 2008, your adjusted gross income (line 37 of form 1040) must be less than:
   
   *With NO qualifying children
   -$12,880 if you are single
   -$15,880 if you are married (filing jointly)
   
   *With ONE qualifying child
   -$33,995 if you are single
   -$36,995 if you are married (filing jointly)
   
   *With TWO qualifying children
   -$38,646 if you are single
   -$41,646 if you are married (filing jointly)

2. In addition to the income requirements above you must meet a few additional criteria to claim the earned income tax credit:
   * You must have a valid US social security number
   * Your filing status can not be married filing seperately
   * You must be a US citizen or resident alien for all of 2008
   * You can not have investment income over $2,950
   * You must have earned income from work in 2008
   * You must be between ages 25 and 65

3. If you meet the criteria above, you are probably eligible for the 2008 earned income credit. The application, including additional criteria to determine a child's qualification is included. If you meet the eligibility requirements, complete this form and submit it along with your 2008 tax return.

Resources

• See if You Qualify for Earned Income Credit

[heatherschulte]

on 2/12/2009 Good explanation of Earned Income Credit. I know sometimes people forget this.