What Is EITC and How to Check Your Qualification?

EITC or the Earned Income Tax Credit is a provision from the government to allow people with low to moderate income for keeping more of their earned amount. It is a refundable federal income tax credit to help individuals and families. The tax credit legislation was approved by the Congress in 1975 to reduce the burden of social security taxes and also provide citizens with an incentive to work. The refunds are generated once EITC collects more amount of money than what they actually owed.

How to qualify for EITC?

  • Filing a tax return needs to be done even if you don’t owe any taxes or you are not require to file one.
  • Earned income from employment, self-employment, daily wages or any other source should be declared while filing for EITC. For Detailed information, click on this LINK.
  • It can be filed individually or as a joint return when you are filing along with your spouse. However, there are set rules that are available on IRS website for checking your qualification for a joint return.
  • In case of a joint return, if you and your spouse meet all the rules for Everyone, and have a child living with you then you may qualify for EITC. However, the child must pass age, residency, relationship, and joint return tests to be your qualifying child. There are four tests that are needed to be passed for each child claimed. Find detailed information HERE.
  • There is nothing to worry about if you don’t have a child because you can still qualify for EITC but you may be required to meet other criteria set for those without a qualifying child. For more information about the rules, click HERE
  • Make sure that you match your income limits, maximum credit amounts and verify with Tax Law updates for the year before applying.
  • There are special set of rules that need to be fulfilled for individuals who are part of military, ministers, members of the clergy, receiving disability benefits or affected by a disaster. Read for more information about the special set of rules.
  • A person with disability or having children with disabilities can also qualify for EITC based on the rules provided HERE on IRS website.

EITC is a good way to support individuals with low or moderated income and can greatly help in the progress and overall development. Shoot us any queries through comments or if you want us to talk about a topic of your choice that can help people with such matters.

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