- FTPS
The earned income tax credit can put money in taxpayers' pockets
The earned income tax credit benefits working people with low-to-moderate income. Last year, the average credit was $2,445. EITC not only reduces the amount of tax someone owes, but may also give them a refund, even if they don’t owe any tax at all.
Here are a few things people should know about this credit:
Taxpayers may move in and out of eligibility for the credit throughout the year. This may happen after major life events. Because of this, it’s a good idea for people to find out if they qualify.
To qualify, people must meet certain requirements and file a federal tax return. They must file even if they don’t owe any tax or aren’t otherwise required to file.
Taxpayers qualify based on their income, the number of children they have, and the filing status they use on their tax return. For a child to qualify, they must live with the taxpayer for more than six months of the year.
Here’s a quick look at the income limits for the different filing statuses. Those who work and earn less than these amounts may qualify.
Married filing jointly:
Zero children: $21,370
One child: $46,884
Two children: $52,493
Three or more children: $55,952
Head of household and single:
Zero children: $15,570
One child: $41,094
Two children: $46,703
Three or more children: $50,162
The maximum credit amounts are based on the number of children a taxpayer has. They are the same for all filing statuses:
Zero children: $529
One child: $3,526
Two children: $5,828
Three or more children: $6,557
Taxpayers who file using the status married filing separately cannot claim EITC.
Source: www.irs.gov