February 6, 2015
Since it was enacted almost 40 years ago, the Earned Income Tax Credit has been boosting revenues of low and moderate income workers. The IRS reports that four of every five employees eligible for the EITC claim the benefit, however they'd like to see everyone who qualifies take advantage of it.
If a taxpayer qualifies, this tax credit can help them give their budget a little extra wiggle room this tax season. Some facts about the EITC that taxpayers need to know:
Even if someone hasn't qualified in the past, if their family or financial situation has changed, there's a chance they may be eligible this year. Taxpayers should review the requirements yearly, because they have to claim the credit on their taxes in order to receive it. Taxpayer must have worked through the year and earned an income under $52,427. They can still file a claim for the credit even if they aren't required to file a tax return.
The EITC has a specific set of guidelines, and it's important to follow them correctly in order to get the credit. Taxpayers should consider the following:
Taxpayer can't file Married Filing Separately.
All parties listed on the return, (taxpayer, their spouse, and dependent children) must have a valid Social Security Number.
Income such as wages, self-employment, and farm income, must have been earned during the tax year.
If a taxpayer is married or single, they can be eligible for the credit whether they have children or not. However, without children, they have to meet additional age, residency and dependency restrictions.
Special guidelines apply to all military personnel serving in a combat zone.
"The Earned Income Tax Credit can decrease the amount of federal taxes a taxpayer owes, which can grant them a refund." explained Paul Stanley of eTax.com. "Qualified taxpayers can receive a credit worth up to $6,143." "That's reason enough to see if a taxpayer qualifies today!"