Learn about Earned Income Credit & lower your taxes!

Real Facts on Earned Income Credit

earned income credit irs refund
Many people do not fully utilize legitimate deductions and tax credits. Often this is because they do not have a complete understanding of what they qualify for. The commonly known Earned Income Credit isn't used correctly by scores of taxpayers, leading to lost refunds and even high tax debts. This page will help you better understand the Earned Income Credit.

What Is the Earned Income Credit?

It is a widespread misconception that the Earned Income Credit is just a way to lower taxes by claiming children. While dependents are involved, that is not its definition. The Earned Income Credit was created for lower income working families and individuals. This means it is for those working and not receiving a high income. There are many people who fit this description and never use the Earned Income Credit. Below is a list of requirements.

  • As with anything tax related, you need a valid Social Security Number.
  • You have to be a U.S. citizen or resident alien for the entire year you are filing for.
  • You cannot also claim the Foreign Earned Income Exclusion.
  • The one filing status you cannot use is Married Filing Separately.
  • You must be at least 25 but no older than 64, and so must your spouse.
  • You cannot be claimed as a dependent, and neither can your spouse.

What Can the Earned Income Credit Do for You?

For the year 2009, nearly $59 Million was given to taxpayers across the country through the Earned Income Credit tax program. Through 2012, you can expect that number to get higher and higher. Currently, the refund ranges from $457, claiming no dependents, to as much as $5,666, claiming three or more. The laws regarding Earned Income Credit will change for the 2013 tax year, but it is a very rewarding program at present.

Earned Income Credit Facts to Remember

Any child you claim for the Earned Income Credit must actually be your dependent by law. The child must be your biological child, step-child, officially adopted child, or foster child. Below are the rest of the conditions for claiming dependents.

  • Any child being claimed must have a valid Social Security Number.
  • The child must also be under 18 years old or be a full-time student under 23 years old.
  • Your child also cannot file a joint return with someone else.
  • In situations regarding divorce, only one parent can claim the child.
  • The child must also live with you for more than 6 months out of the year.

Many people qualify for the Earned Income Credit, and you may be one of them. As with any legitimate Tax Credit, it can greatly lower your taxes and even get you a refund. To learn more about what tax credits you may be eligible for, consult a professional. Call now or fill out the form below for a free tax debt consultation to learn more how the Earned Income Credit can lower your taxes! We'll only connect you with a tax debt relief company holding at least a B rating with the Better Business Bureau.

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