Do You Qualify For The Earned Income Tax Credit?

If you don't have a high income, you may qualify for a larger tax refund than you think. The Earned Income Tax Credit (EITC), sometimes called EIC is a tax credit for low to moderate income working individuals and families.

Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. 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.

How do you know if you qualify? You must have earned income from employment, self-employment or another source and meet certain rules. In addition, 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.

Unfortunately, the specific criteria is not clearly defined. The best way to find out if you qualify is to answer this survey on the Internal Revenue Service (IRS) website.

However, you can quickly see if there is potential for qualifying by consulting the income requirements. The tax credit is available for people earning less than these amounts:

• $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

The Tax Relief and Job Creation Act signed into law December of 2010 provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009, 2010, 2011 and 2012 tax years.