Earned Income Tax Credit

Earned Income Tax Credit

The Earned Income Tax Credit is a refundable tax credit available to low to moderate income working individuals and families.  In order to qualify for the credit, the taxpayer must have earned income which also includes some types of nontaxable income received from an employer for work (meals and lodging, etc.).  The credit is available for both taxpayers with and without children.  However, for taxpayers who do not have children, they must be between the ages of 25 through 64 and not a dependent of another person.  A taxpayer with at least one child can request a portion of the earned income credit in advance.  The advance is limited to 60% of the maximum credit available for one child and must be requested.

Here are some requirements to receive the Earned Income Tax Credit:

The person claiming the credit must not have investment income, such as interest, dividends, non-business rents and royalties exceeding $3100.

The person claiming the credit cannot be a qualifying child of another person. 

If the taxpayer has a qualifying child, a larger credit will be granted.  In order to be classified as a qualifying child, the child must meet the following requirements:

• Relationship:  Taxpayer’s son, daughter, adopted child, grandchild, stepchild, brother or sister, stepbrother or stepsister, or eligible foster child, or any descendant thereof
• Age:  Was either under age 19, a full time student under age 24, or mentally or physically
• Residency: Lived with the taxpayer in the US for more than half of the year (the whole year for a foster child)