The Earned Income Tax Credit benefits working people with low- to moderate-income levels. Several requirements determine eligibility for the credit, and it’s fairly common to make errors when claiming an EITC. According to the IRS, about 27 percent of EITC returns are paid in error.
Tax preparers have due diligence requirements, or questions they must ask clients to determine eligibility. There are several things an individual taxpayer can do to find out if they qualify.
Ask yourself the following questions:
- Is my filing status married filing jointly, head of household, qualifying widow(er) or single?
- Does my earned income and adjusted gross income fall within the limits?
- For single, head of household or surviving spouse, income must fall between $14,820 for zero qualifying children to $47,747 for three or more qualifying children.
- For married filing jointly, income must fall between $20,330 for zero qualifying children to $53,267 for three or more.
- Do I have a qualifying child?
- My child passes the relationship, age, residency and joint return tests.
- No, but I was a U.S. resident for more than half the year; I cannot be claimed as a dependent or qualifying child on anyone else’s return; and I am at least 25 but under 65 years old at the end of the tax year.
Additionally, you, your spouse and any qualifying child on your return must each have a Social Security number that is valid for employment.
The IRS has an EITC Assistant that helps determine eligibility for the tax credit. If you qualify, you must file a tax return to claim the EITC.