The Earned wage Tax reputation (Eitc) is a tax reputation that is ready for most low wage earning taxpayers. It was introduced into the tax code to promote and encourage people to work and earn income. The reputation is refundable in that if a taxpayer has no excellent taxes or if the taxes due are less than the qualifying credit, the taxpayer receives a refund check from the Irs. This is unlike original tax credits, which do not certify a tax refund check, even if an excellent reputation remains. Though it is one of the most accessible tax due for taxpayers who earn low incomes, the guidelines of qualifications and the amounts that one is entitled to is not uncomplicated for the regular taxpayer. However, given that many of the qualifying taxpayers are low wage earners and may not be able to afford expert tax help, many are unable to properly claim this credit. For this reason, the Irs has placed on its website, software that assists taxpayers to determine if they qualify for the reputation and how much they qualify for. Some of the qualifying guidelines for this tax reputation are discussed below:
Income Caps
Irs Tax Form 1040
To qualify for the Eitc, there are discrete wage maximums and they are higher for taxpayers with more qualifying children. For taxpayers with no qualifying child, the wage cap is ,460.00 for singles and ,470.00 for married couples filing jointly. Taxpayers with one qualifying child have an wage cap of ,535.00 and ,545.00 for those that file jointly. For taxpayers with two qualifying children, the caps are ,363.00 for singles and ,373.00 for married couples filing jointly. Finally, for taxpayers with three or more children, the wage cap is ,350.00 for singles and ,362.00 for couples filing jointly.
Tax reputation Amounts
For the 2010 and 2011 tax years, the qualifying tax reputation is a maximum of 7.00 for taxpayers with qualifying no children, ,050.00 for taxpayers with one qualifying child, a maximum of ,036.00 for those who have two qualifying children, and a maximum of ,666.00 for those with three children and above.
Qualifying Children
For children to qualify for observation under The Earned wage Tax Credit, they have to be 19 years and below. However, taxpayers with full-time-student children can claim the reputation against them up to the age of 23. Enduringly disabled children qualify, irrespective of their age. The children have to be dependents of the taxpayer who live together with the taxpayer at least for 6 months within the tax year. This especially applies for divorced couples with shared child custody. The children may be natural children, adopted children, foster children, grandchildren, or step-children. Siblings may also qualify under extra circumstances.
Applying for the Credit
If you qualify for the Eitc, you can claim the reputation on your tax returns with Form 1040Ez, 1040A, or 1040, in the tax due section. There are extra rules that sway military personnel who apply for this credit. Further details on the qualification and application of the Eitc can be found in Irs Publication 596 - Earned wage Credit. Besides the Irs, 23 U.S. States also furnish the Eitc to their residents and you will need to check if your single state provides this tax credit.
on the main page Qualification Guidelines for the Eitc
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