Earned Income Tax Credit (EITC)

DO YOU QUALIFY FOR THE

“EARNED INCOME TAX CREDIT (EITC)”?

EITC, the Earned Income Tax Credit, is a tax credit to help you keep more of what you earned. It is a 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.

Number of Qualifying Children in family	Earned Income & Adjusted Gross Income* is LESS THAN		2012 Maximum Credit
	Single	Married, filing jointly
3	$45,060	$50,270	$5,891
2	$41,952	$47,162	$5,236
1	$36,920	$42,130	$3,169
0	$13,980	$19,190	$475

 *Adjusted Gross Income includes all your income minus certain deductions. Find the amount of your AGI on line 36 on Form 1040, line 21 on Form 1040A, and line 4 on Form 1040EZ.

Taxable earned income includes:

• Wages, salaries, tips, and other taxable employee pay;
• Union strike benefits; 
• Long-term disability benefits received prior to minimum retirement age;
• Net earnings from self-employment if:

ü  You own or operate a business or a farm or

ü  You are a minister or member of a religious order or

ü  You are a statutory employee and have income. You are a statutory employee if you receive a Form W-2 on which the “Statutory employee” box (box 13) is checked.

Examples of Income that are Not Earned Income:

·         Pay received for work while an inmate in a penal institution 

·         Interest and dividends 

·         Retirement income 

·         Social security 

·         Social security disability insurance 

·         SSI 

·         Military disability pensions 

·         Unemployment benefits 

·         Alimony 

·         Child support

To get free help to determine if you qualify for EITC see the “Free Tax Help” articles previously on this blog.