Find out if you qualify for Earned Income Tax Credit EITC / EIC

EITC, the Earned Income Tax Credit, sometimes called EIC 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. 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.

Do You Qualify for EITC?

To qualify for EITC you must have earned income from employment, self-employment or another source and meet certain rules. Also, 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.

Earned Income Tax Credit Rules for Everyone

To qualify for Earned Income Tax Credit or EITC, you and your spouse if married and filing a joint return, must meet all of the following rules:

  1. Have a Social Security Number that is valid for employment
  2. Have earned income from employment, self-employment or another source
  3. Cannot use the married, filing separate filing status
  4. 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 choose to file a joint return and be treated as a resident alien
  5. Cannot be the qualifying child of another person*
  6. Cannot file Form 2555 or 2555-EZ (related to foreign earned income)
  7. Your Adjusted Gross Income and earned income must meet the limits shown on the Income Limits, Maximum Credit Amounts and Tax Law Updates Page
  8. Your investment income must meet or be less than the amount listed on the Income Limits, Maximum Credit Amounts and Tax Law Updates Page

After you meet the EITC rules for everyone, you must also meet the rules for either workers without a qualifying child or have a child that meets the *qualifying child rules.

Find out if you are eligible for the EITC by answering a few questions and providing basic income information, using the IRS’s online EITC Assistant web tool. The assistant also helps determine if your child meets the rules for a qualifying child and estimates the amount of your credit.  Find the English EITC Assistant here or o haga click aquí para seleccionar la Versión en Español del Asistente.

Special EITC Rules

There are special EITC rules for members of the military, ministers, members of the clergy and those receiving disability benefits. Find out more about the special EITC rules.

Rules for those Without a Qualifying Child

If you and your spouse, if filing a joint return, meet the EITC Rules for Everyone and you do not have a qualifying child, you may be eligible for EITC. Find the rules for those without a qualifying child here.

EITC Income Limits, Maximum Credit Amounts and Tax Law Updates

See the EITC Income Limits, Maximum Credit Amounts and Tax Law Updates for the current year, previous years and the upcoming year.

Special EITC Rules

Special EITC rules for members of the military, ministers, members of the clergy, those receiving disability benefits and those impacted by disasters. Read more about the special rules.

Disability and EITC

Many persons with disabilities or persons having children with disabilities qualify for the Earned Income Tax Credit or EITC. Find out more about Disability and EITC.

Please contact Chicago CPAs at 773-728-1500

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Haven’t Filed an Income Tax Return?

If you have been procrastinating about filing your 2012 tax return or have other prior year returns that have not been filed, you should consider the consequences.

Taxpayers should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. All payment plans require continued compliance with all filing and payment responsibilities after the plan is approved.
Facts about Filing Tax Returns

  • Failing to file a return or filing late can be costly. If taxes are owed, a delay in filing may result in penalty and interest charges that could substantially increase your tax bill. The late filing and payment penalties are a combined 5% per month (25% maximum) of the balance due.
  • If a refund is due, there is no penalty for failing to file a tax return. But by waiting too long to file, you can lose your refund. In order to receive a refund, the return must be filed within three years of the due date. If you file a return and later realize you made an error on the return, the deadline for claiming any refund due is three years after the return was filed, or two years after the tax was paid, whichever expires later.
  • Taxpayers who are entitled to the Earned Income Tax Credit must file a return to claim the credit, even if they are not otherwise required to file. The return must be filed within three years of the due date in order to receive the credit.
  • If you are self-employed, you must file returns reporting self-employment income within three years of the due date in order to receive Social Security credits toward your retirement.

Taxpayers who continue to not file a required return and fail to respond to IRS requests to do so may be subject to a variety of enforcement actions, all of which can be unpleasant. Thus, if you have returns that need to be filed, please call this office so we can help you bring your tax returns up-to-date, and, if necessary, advise you about a payment plan.

Please contact us at 773-728-1500.  We are Chicago CPAs, who are here to help you.

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