How to Get an Earned Income Credit

If your family is considered low to moderate income, you may be eligible for the Earned Income Credit (EIC), particularly if you have kids. The federal tax credit is refundable, meaning it is deducted from your tax liability instead of your taxable income and may result in a negative balance. In that case, the government will send a check for the difference.

Things You'll Need

• Form 1040, 1040A or 1040EZ and accompanying EIC worksheet
• W-2

Instructions

1. Visit the IRS website to determine if you qualify for the EIC. At the time of publication, you qualified if your 2010 adjusted gross income was less than $43,352 ($48,362, married filing jointly) with three or more qualifying children; $40,363 ($45,373, married filing jointly) with two qualifying children; $35,535 ($40,545, married filing jointly) with one qualifying child; $13,460 ($18,470 married filing jointly) with no qualifying children.

2. Review IRS Publication 596 to verify that your child qualifies. If you do not have a child or your child does not qualify, skip this step. If your child qualifies, complete Schedule EIC with your child's information. You must attach this to your Form 1040.

3. Get your W-2 and any other documents that show your earned income for the year. Determine your exemptions and deductions (referring to last year's 1040 for brevity).

4. Download a Form 1040 (or 1040A or 1040EZ) and the accompanying EIC worksheet. Fill out your 1040 as you normally would. Use the EIC worksheet to determine your tax credit.

5. File your return by April 15, using a tax software program or tax professional.

Tips & Warnings

• If you qualify for the EIC credit, you may also qualify for a similar state credit. Contact your state office to see if you qualify.

References

• IRS: EITC Income Limits
• IRS Publication 596

Resources

• TurboTax