The Earned Income Tax Credit (EITC)

By: Alvin Chang Texas Tech Low Income

Taxpayer Clinic
Address: 1802 Hartford Ave

Lubbock, TX 79409

EITC Definition
EITC, the Earned Income Tax Credit, sometimes called

EIC is a tax credit to help you keep more of what you earned. refundable federal income tax credit for low to moderate income working individuals and families.
When EITC exceeds the amount of taxes owed, it results

in a tax refund to those who claim and qualify for the credit.
To qualify, you must meet certain requirements and file

a tax return, even if you do not owe any tax or are not required to file.

Eligibility
To qualify for EITC you must have earned income

from employment, self-employment or another source and meet certain rules. Also, you must either meet the additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.

What is Earned Income?

Earned income includes all the taxable income and

wages you get from working.

There are two ways to get earned income: You work for someone who pays you OR You work in a business you own or run Examples of income that is not earned income Interest and dividends Retirement income Social security Unemployment benefits

Earned Income Limits

Earned Income and adjusted gross income (AGI) must

each be less than:

$43,998 ($49,078 married filing jointly) with three or more qualifying children $40,964 ($46,044 married filing jointly) with two qualifying children $36,052 ($41,132 married filing jointly) with one qualifying child $13,660 ($18,740 married filing jointly) with no qualifying children

Investment income must be $3,150 or less for the year.

EITC Rules for Everyone

To qualify for Earned Income Tax Credit or EITC, you and

your spouse if married and filing a joint return, must meet all of the following rules:

Have a valid Social Security Number Have earned income Cannot use the married, filing separate filing status Must be a US citizen or resident alien all year or a nonresident alien married to a US citizen or resident alien and choose to file a joint return Cannot be the qualifying child of another person Cannot file Form 2555 (foreign earned income) Your adjusted gross income and earned income must meet certain limits

Qualifying Child Rules

Your child must have a valid Social Security Number and must pass all of the following tests to be your qualifying child for EITC:

Relationship
Your son, daughter, adopted child1, stepchild, foster child2 or a descendent of

any of them such as your grandchild Brother, sister, half brother, half sister, step brother, step sister or a descendant of any of them such as a niece or nephew

Age. At the end of the filing year, your child was:

Younger than you (or your spouse if you file a joint return) and younger than 19, or younger than 24 and a full-time student Any age if permanently and totally disabled3

Residency
Child must live with you (or your spouse if you file a joint return) in the United

States4 for more than half of the year.

Joint Return
The child cannot file a joint return for the year, unless the child and the child's

spouse did not have a filing requirement and filed only to claim a refund.

Rules for those Without a Qualifying Child

If you do not have a child or do not have a child that meets all four

qualifying child tests and your income is low, you may be able to claim EITC, the Earned Income Tax Credit. We believe this group of workers is the largest group who do not file a return to claim the credit. And, you must file a return to claim EITC.
After you and your spouse, if you are married and file a joint return,

meet the EITC rules for everyone, you must meet these additional rules if you do not have a qualifying child:

You (and your spouse, if filing a joint return) must have lived in the United States for more than half the tax year, Either you or your spouse, if filing a joint return, must be at least age 25 but under age 65, You (or you spouse, if filing a joint return) cannot qualify as a dependent of another person.

Special Rules
Special EITC rules for members of the military,

ministers, members of the clergy, those receiving disability benefits and those impacted by disasters.
Many persons with disabilities or persons having

children with disabilities qualify for the Earned Income Tax Credit or EITC.

EITC and the rest of the Tax Code

EITC recipients may also receive the child tax credit

and child care tax credit.

No direct interaction between EITC and these other

credits.
Personal exemptions Standard deduction

These features are part of an overall patchwork of

tax benefits for families with children

Questions?