What is the earned tax credit?
The tax credit (EITC) is the name of the income tax issued to a specific group of taxpayers by the United States Government. EITC was created in an effort to reduce the tax liability of low wages. In some cases, EITC can also provide a federal refund to the taxpayer. Certain qualification requirements must be met before the person is able to qualify for the earned income tax credit.
Only some people are entitled to this credit. Citizens of the United States, the inhabitants of extraterrestrials who live as such throughout the tax year, or the non -resident extraterrestrials married with a citizen and jointly serving, may request a earned tax credit. Applicants need a valid social security number and must earn income during the tax year, either through employment or self -employment.
The taxpayer may not have an EITC qualification dependent. However, dependent persons increase the possible amount of EITC. Those without a qualifyForged children must be aged 25 to 65 years of age must not be mentioned as dependent on the second taxpayer and must live in the US for more than six months.
The qualifying child is the one who lives with the taxpayer for more than half a year and is under the age of 19 at the end of the tax year. Children permanently disabled or full -time students under 24 who live at home are also considered qualified children. Legally adoptive or foster children, stepchildren or other children are also eligible depending on the reception of the taxpayer. Those who are not sure that their dependent will qualify, should visit the Internal Revenue Services (IRS) website before submitting.
The individual can also determine the amount of the loan it has on the IRS website. The amount of the loan provided depends on a number of factors, including earned income, adjustable gross income and investment income. Whether the IndianDual has one or more qualifying children also determine how much credit is due. IRS provides worksheet and EITC table for easy calculation.
In order to claim earned income credit, an individual can use the earned revenue table and fill in the EIC sheet in form 1040, 1040a or 1040z instruction book. Earned income includes any taxable wages that the individual receives. Tips, advantages of trade union strike and wage self -employment are included as a taxable income. Income that is not eligible include gambling, gifts and some forms of investment revenue.