Earned Income Tax Credit or EITC (sometimes also called Earned Income Credit) is a form of financial assistance or benefit offered by the IRS to the individuals with a relatively low income.
You may qualify for it if you worked any part of 2013 and earned $51,567 or less from wages (salaries, tips, commissions, etc), self-employment, or farming. Tax credit means that your tax liability can be reduced by the amount of credit you qualified for and in many cases can mean you receive a refund. The amount of credit will depend on your income, family size, and other factors. Families with qualified children can get up to $6,000 and the average credit in 2013 was over $2,300.
Who can qualify for EITC?
According to the IRS 1 in 5 individuals eligible for the credit overlook it. The IRS can assist you determine whether or not you qualify for a credit here and in order to receive it you have to file your tax return on Form 1040. In general, the following are the rules you have to meet in order to claim the credit:
- Valid social security number for employment – you and your spouse if filing jointly.
- You need to have earned income and not go over certain limit (see below).
- Your filing matters: you cannot claim EITC if filing as Married Filing Separately.
- Immigration status: US citizen, resident alien, nonresident alien married to a US citizen or a resident alien and filing jointly.
- You can’t be a qualifying child of somebody else.
- You can’t have foreign income.
- And one of the following: have a qualifying child or must be between ages of 25 and 65, live in the US for more than 6 months in the past year, and not be claimed as someone’s dependent
What is EITC credit limit for 2013 tax year?