EITC or Earned Income Tax Credit is a refund that is given that is given to low wage couples and individuals with qualifying children.
This concept was started in the year 1975. The main idea behind this concept is to provide financial relief to Americans who are earning meager wages. The amount is decided by the number of children. Those who have no children but earn meager wages during a particular year are also eligible for EITC.
To be eligible for this refund one must, however, fullfil certain requirements. However, these requirements change every year, thus it would be wise to keep track of them.
The maximum amount that one can get for the year 2010 is $ 5,666. However to get this amount one must have three or more qualifying children. $ 5,036 is the maximum amount that will be given to those with two qualifying children and $ 3,050 is the maximum amount that will be given to those with only one qualifying child. Those with no qualifying children will get a maximum of $ 457.
If an individual has more than $ 3,100 in investment income then they dont qualify for EITC. Couples will have to file the tax returns together otherwise they are not eligible for this refund.
The requirements for a qualifying child are
Have a valid Social Security Number
Must be related to person applying for ETIC
Child
Stepchild
Adopted child
Foster child
Grandchild or Great-Grandchild
Siblings
Step siblings
Descendants of either siblings or step siblings.
Age of the child
Must be younger than the applicant
Below 19 years.
Between 19 and 24 and must be a full-time student.
No age limit if the child is permanently and totally disabled.
The child must have resided in the for more than six months of the year.
The child and its spouse cant file a joint return, unless they are not required to file and did so only to claim a refund.
Only one person can claim the qualifying child. In the case of two or more individuals claiming the same child, IRS has some tiebreaker rules to solve the problem.
Author recommends check out more reviews on rapid tax and efile
This concept was started in the year 1975. The main idea behind this concept is to provide financial relief to Americans who are earning meager wages. The amount is decided by the number of children. Those who have no children but earn meager wages during a particular year are also eligible for EITC.
To be eligible for this refund one must, however, fullfil certain requirements. However, these requirements change every year, thus it would be wise to keep track of them.
The maximum amount that one can get for the year 2010 is $ 5,666. However to get this amount one must have three or more qualifying children. $ 5,036 is the maximum amount that will be given to those with two qualifying children and $ 3,050 is the maximum amount that will be given to those with only one qualifying child. Those with no qualifying children will get a maximum of $ 457.
If an individual has more than $ 3,100 in investment income then they dont qualify for EITC. Couples will have to file the tax returns together otherwise they are not eligible for this refund.
The requirements for a qualifying child are
Have a valid Social Security Number
Must be related to person applying for ETIC
Child
Stepchild
Adopted child
Foster child
Grandchild or Great-Grandchild
Siblings
Step siblings
Descendants of either siblings or step siblings.
Age of the child
Must be younger than the applicant
Below 19 years.
Between 19 and 24 and must be a full-time student.
No age limit if the child is permanently and totally disabled.
The child must have resided in the for more than six months of the year.
The child and its spouse cant file a joint return, unless they are not required to file and did so only to claim a refund.
Only one person can claim the qualifying child. In the case of two or more individuals claiming the same child, IRS has some tiebreaker rules to solve the problem.
Author recommends check out more reviews on rapid tax and efile
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