Spending and Saving

Do You Qualify for The Earned Income Tax Credit?

The EITC is a tax benefit for working families who have children. Depending on how much you make, this credit can give you a significant boost on your tax refund after you submit your filings.

No matter how you approach it, tax time can be stressful because of how complicated the process can be. Although complicated, once you understand the aspects of doing your taxes, you may be surprised at some of the benefits you can take advantage of. One aspect of taxes, especially if you have a family with children is the Earned Income Tax Credit (EITC). The EITC is a tax benefit for working families who have children. Depending on how much you make, this credit can give you a significant boost on your tax refund after you submit your filings. 

In order to take advantage of the EITC and claim it on your taxes, the children have to be considered “qualifying children”. According to the Tax Policy Center, The earned income tax credit “equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches its maximum. The maximum credit is paid until earnings reach a specified level, after which it declines with each additional dollar of income until no credit is available.”

How To Qualify for the EITC

In order for a household to qualify for the EITC you must file a federal tax return and there are several factors that have to be met. Some of the requirements are basic and straightforward while others may vary by family units. Here are the basic qualifying factors: 

  • You must have proof of earned income for that tax year. Earned income is recognized as all the taxable income that you might receive from working for yourself, someone else, a business, or a farm you might own. 
  • You must have proof of a valid social security number.
  • You must file under specific filing requirements. You can file as a head of household, married filing jointly, single, or qualifying widow or widower. If you are filing married filing separately, you cannot claim the EITC. 
  • You must have been a U.S. Citizen or a resident alien for the entire year you are filing for. 
  • Your investment income must be below $3,650 for the year you are claiming the credit. 

How To Claim the EITC

In order for you to claim the EITC, your child needs to qualify for the credit. A qualifying child must meet the following four factors: Age requirements, relationship requirement, residency, and filing status. 

Age: The age requirement stipulates that your child must meet one of the following: 

  • Your child must be under 19 years old and younger than you or your spouse. 
  • Your child can be any age if they are totally disabled at any point during the year you are filing.
  • Your child is a full time student for at least five months in the year, they are under 24, and are younger than you and your spouse if you are filing jointly. 

Relationship: The relationship requirements stipulate that your qualifying child must be a biological child, stepchild, adopted, or foster child. You can also claim half-siblings and step siblings along with grandchildren and nieces and nephews. If you are claiming a foster child, they must have been placed with you through a local, state, Indian tribal government, or a licensed tax exempt organization. You can also claim foster children if their placement is through a court order. 

Residency: The qualifying child must have lived with you in the same household for at least 6 months. 

Filing Status: Lastly, to claim the credit, your child cannot have filed a joint tax return with someone else such as a spouse. 

How to Claim the EITC

In order to claim the credit, you must file a federal tax return. You can do this on your own or work with a professional tax preparer. Often, when claiming the EITC, there may be a delay in your tax refund. By law, the IRS cannot give out refunds before the middle of February if you file your taxes with this credit. You can usually expect this credit after March. 

With the power of technology, there are ways to get your refund faster including filing online using tools such as the IRS Free File form and requesting that your refund be given back via direct deposit. 

When claiming the EITC, there are certain forms that will need to be filled out as well. You will need to file the US Individual Income Tax Return Form 1040. Seniors must file the U.S. Tax Return for Seniors Form 1040 SR. You will also need to add qualifying children using the Schedule EIC (Form 1040 or 1040-SR), Earned Income Credit

If you missed the credit for a previous year, you can still claim the credit. To claim it, you can use the IRS tool EITC Qualification Assistant. Additional forms will need to be filled out for prior years. 

Special Qualifying Rules

The IRS allows certain individuals to qualify for the EITC under what it calls the Special Qualifying Rules. These special qualifying rules allow clergy members, military members, and individuals who have disabled family members to take advantage of the EITC as well. 

Can You Claim the EITC Without a Qualifying Child? 

It would not be in true tax fashion if things didn’t get complicated every when filing your taxes and claiming all possible credits. While it is a bit complicated, you can actually still claim the EITC even if there is no qualifying child. To do this, you must meet the following: 

  • Meet the EITC basic qualifying rules listed above.
  • Your primary residence must be in the U.S. for more than 6 months. 
  • You cannot be claimed as a dependent on someone else’s tax return.
  • You must be between 25 0 65 years of age at the end of the tax year you are filing for. 

A benefit of qualifying for the EITC is that you may likely qualify for other tax credits as well. These additional credits include the following: 

  • The Child and Dependent Care Credit
  • The Child Tax Credit and the Credit for Other Dependents
  • The Education Credit

If you are filing with a tax preparer, it is good to go over the details with them so that they understand your unique situation, especially if there are elements of your family unit that are outside what is typical. If you are filing your taxes yourself and are trying to claim the credit, be sure to visit IRS.gov to get more specific details on how to properly claim the credit and avoid errors. 


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