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The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. To qualify, you must meet certain requirements and file a tax return, even if you do not owe any tax or are not required to file. EITC reduces the amount of tax you owe and may give you a refund.

To qualify for EITC you must have earned income from working for someone or from running or owning a business or farm and meet basic rules. And, you must either meet additional rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you.

You can claim the Earned Income Tax Credit (EITC)  if you don’t claim a qualifying child for the EITC. But, you, or your spouse if you file a joint return, must have worked for someone, or run or own a business or farm AND earned less than certain amount in 2017 according to your filing status.

With a qualifying child:   Your child must have a Social Security number that is valid for employment that is issued before the due date of the tax return (including extensions) and must pass all of the following tests to be your qualifying child for EITC:
 

Relationship

  • Your son, daughter, adopted child1, stepchild, foster child2 or a descendent of any of them such as your grandchild
  • Brother, sister, half brother, half sister, step brother, step sister or a descendant of any of them such as a niece or nephew

Age

  • At the end of the filing year, your child was younger than you (or your spouse if you file a joint return) and younger than 19
  • At the end of the filing year, your child was younger than you (or your spouse if you file a joint return) younger than 24 and a full-time student
  • At the end of the filing year, your child was any age and permanently and totally disabled3

Residency

  • Child must live with you (or your spouse if you file a joint return) in the United States4 for more than half of the year

Joint Return

  • The child cannot file a joint return for the tax year unless the child and the child's spouse did not have a separate filing requirement and filed the joint return only to claim a refund.

 

Earned Income and AGI Limits for Tax Year 2017

Earned income and adjusted gross income (AGI) must each be less than:

If filing...

Qualifying Children Claimed

Zero

One

Two

Three or more

Single, Head of Household or Widowed

$15,010

$39,617

$45,007

$48,340

Married Filing Jointly

$20,600

$45,207

$50,597

$53,930

Investment Income Limit

Investment income must be $3,450 or less for the year.

Maximum Credit Amounts

The maximum amount of credit for Tax Year 2017 is:

  • $6,318 with three or more qualifying children
  • $5,616 with two qualifying children
  • $3,400 with one qualifying child
  • $510 with no qualifying children

Source : IRS
https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/claiming-eitc-without-a-qualifying-child.

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-income-limits-maximum-credit-amounts-next-year

Posted 2:50 PM  View Comments

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