Do You Qualify for the Earned Income Tax Credit?

There are many requirements you must meet in order to qualify, but it may lower your tax bill.

Supporting a family can be difficult, not to mention expensive.  Working families  whose income is fairly low need all the help they can get with their income taxes.

TaxPlan1214image_zps60d91ccdThe Earned Income Tax Credit (EITC)  was put in place by Congress to provide relief for low-income families who may have trouble paying their tax bills.

Qualifying for the Credit You may be eligible for the EITC if you have earned income, are not filing as married filing separate, and  are claiming adjusted gross income within certain limits. Earned income would consist of:

  1. Any wages, salaries, tips, and other taxable pay from an employer,
  2. Any union strike benefit payments,
  3. Long-term disability benefits paid to you before you reached minimum retirement age (between 55 and 57, depending on when you were born), and
  4. Net earnings from self-employment if you own a business, run a farm, are a minister or member of a religious order (these will have some special rules), or have income as a statutory employee.

In addition to earned income, any investment income you received must be $3,350 or less for the year to qualify for the EITC.

Taking the Credit If You Have Children

The EITC was put in place to help those with children, so the amount of the credit will depend on the number of children you have.  You can receive a credit if you do not have a qualifying child, but the credit is greater if you do.  A qualifying child would be one who:

  1. Is related to you in any way, except for someone who is a cousin,
  2. Lives with you for more than half the year,
  3. Did not file a joint return except for the sole purpose of getting a refund, and
  4. Is younger than you, and is either younger than 19, or younger than 24 and a full-time student. Permanently and totally-disabled individuals do not have to meet the age standard.

Taking the Credit If You Don’t Have Children

If you do not have a qualifying child, you can still get the credit. However, in addition to the rules mentioned previously, you will have had to have lived in the U.S. for over half the year, be between 25 and 65 years of age, and cannot be claimed as a dependent on someone else’s return.

The Form

In order to claim the credit you will need to file Schedule EIC.  There are a few pieces of information we will need to complete this schedule, such as Social Security cards, birth dates, the previous year’s federal and state returns, and documentation of income (W-2s and 1099s, income and expense records, etc.).

That may sound like a lot of paperwork, but you’d need most of it to file your taxes anyway. If you think you may be eligible for the EITC, contact us at to discuss your situation, and we will be glad to help you.

About Brenda J. McGivern, CPA

Brenda McGivern started her own certified public accounting and management consulting firm in October 2001. The full service CPA firm provides tax and accounting solutions to meet the needs of today's small business and individual. Brenda McGivern has become a trusted advisor and valuable resource her clients rely on for timely, accurate assistance when they need it. Before starting the firm, she worked as an accountant for three years at a local firm and prior to that five years at a large international CPA firm in Boston. She has performed the following tax services: federal, state and local tax planning, international tax planning, estate and succession planning, mergers and acquisitions, capital retention and IRS representation. She has also coordinated assurance engagements, such as financial statement audits, reviews and compilations from the planning phase through the reporting phase. She has prepared and reviewed regulatory filings for numerous regulatory agencies including the Security and Exchange Commission. Prior to these positions she was selected from over 2,000 candidates into an eight-person intensive financial management program at an international technology company. The program consisted of graduate level classroom study and two six-month rotational assignments in financial operations. She graduated cum laude from the University of Massachusetts at Amherst and holds a Bachelors Degree in Business Administration with a concentration in accounting. McGivern also holds a license in Massachusetts as a Certified Public Accountant and is a member of the American Society of Certified Public Accountants and the Massachusetts Society of Certified Public Accountants. She resides in Stoughton, Massachusetts with her husband Brian, and their sons Sean, Ryan and Conor and their dog, Davis.
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