How to Determine IRS Eligibility for The Earned Income Tax Credit

Taxpayers that think they may be eligible for the Earned Income Tax Credit should carefully review the eligibility requirements. The Earned Income Tax Credit (EITC) is a refundable credit for lower income taxpayers with earned income. If you qualify for the credit you may be entitled to a refund even if you did not have any federal tax withheld from your wages.

Difficulty: Moderate

Instructions

1. Review your filing status for eligibility. The credit may be claimed by single taxpayers or married taxpayers filing a joint return. Married taxpayers filing separately do not qualify for the EITC.

2. Review the maximum income limitations specified for the filing year for your filing status. To be eligible, taxpayers must be below the maximum income limitations specified for the filing year. There are different maximum income levels based on the number of qualifying children, one, more than one, or none. For a child to be a qualifying child they must meet specific relationship, age, and residency tests. The taxpayer must have a valid social security number, be a US citizen or resident alien for the entire year, cannot have foreign earned income, and cannot have more than the specified investment income limit for the year.

3. Review the specific types of income that qualify as earned income for the EITC. Wages, salaries, tips, and other taxable employee pay, net self-employment income, and statutory employment gross income are all eligible. Non-taxable combat pay can be included for EITC purposes.

4. Review the age and dependency requirements for eligibility. You cannot be a dependent of another person and claim the credit. You must be at least 25 years old but under 65 years old. You cannot be a qualifying child of another person. Your qualifying child cannot be used by another person as a qualifying child for the EITC. Your child must have lived with you for more than half of the year in your home.

Tips & Warnings

• When calculating the Earned Income Tax Credit due it is very important that instructions be carefully followed and checklists provided should be used as there is a high potential of error involved in this calculation.. For additional information refer to IRS Publication 596 Earned Income Credit (EIC). It includes worksheets, tables, and step by step assistance to determine eligibility. You can also determine eligibility online by using the IRS EITC Assistant at www.irs.gov/eitc.

Resources

• For Additional IRS Information
• Go to EITC Calculator