Friday, October 3, 2008

Do You Qualify for the Earned Income Tax Credit?

It’s easier than ever to find out if you qualify for EITC

The Earned Income Tax Credit (EITC) sometimes called the Earned Income Credit (EIC), is a refundable federal income tax credit for low-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 the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

To qualify, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return.

The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

Will you qualify for EITC this year?

Find out if you are eligible for the Earned Income Tax Credit (EITC) by answering some questions and providing basic income information using the EITC Assistant.
Available in English and Spanish. The 2007 EITC Assistant is now available.

Childless Workers
You do not have to have a child to qualify for EITC, however, you must meet certain rules.

Special Rules
Special rules apply for calculating earned income for members of the U.S. Armed Forces in combat zones, members of the clergy, hurricane victims, and those with disability retirement income.

EITC Information for
Tax Professionals

EITC Assistant
Additional Publications and Tools
EITC Thresholds, limitations and updates
EITC Questions and Answers
Advance EITC

Don’t overlook your state credit
If you qualify to claim EITC on your federal income tax return, you also may be eligible for a similar credit on your state or local income tax return. Twenty-two states, the District of Columbia, New York City, and Montgomery County, Maryland, offer their residents an earned income tax credit.
Click here for a list of states with EITC.
Questions about eligibility or how to claim EITC on a state or local return should be directed to your state/local tax authorities.

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