Financial / Tax info

EITC is a tax credit for certain people who work and have low wages, and can mean more money in the pocket of those who qualify. This tax credit reduces the amount of tax owed or gives a tax refund.

The Internal Revenue Service (IRS) indicates 15%-20% of households who are entitled to EITC do not claim it, which is equal to 3.5-7 million households. To claim the EITC on a tax return, all of the following criteria must be met:
o Must have a valid Social Security number;
o have earned income from employment or from self-employment;
o the filing status cannot be married, filing separately;
o must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return;
o cannot be a qualifying child of another person;
o if the person does not have a qualifying child, must:
o be age 25 but under 65 at the end of the year,
o live in the United States for more than half the year, and
o not qualify as a dependent of another person;
o cannot file Form 2555 or 2555-EZ (related to foreign income)
o must meet the EITC Income Limits, Maximum Credit Amounts and Tax Law Updates

Earned income and adjusted gross income must each be less than:
o $43,352 ($48,362 married filing jointly) with 3 or more qualifying children
o $40,363 ($45,373 married filing jointly) with 2 qualifying children
o $35,535 ($40,545 married filing jointly) with 1 qualifying child
o $13,460 ($18,470 married filing jointly) with no qualifying children

The 2010 Tax Year maximum credit is:
o $5,666 with 3 or more qualifying children
o $5,036 with 2 qualifying children
o $3,050 with 1 qualifying child
o $457 with no qualifying children

The IRS website, www.irs.gov, offers online tools and fact sheets that answer questions regarding EITC. Don’t let families miss the opportunity to access the tax credit and/or refund owed to them!