Earned Income Credit ⢠⢠⢠â¢
Transcription
Earned Income Credit ⢠⢠⢠â¢
Earned Income Credit The earned income credit (EIC) is a tax credit for certain people who work and have earned income under $53,267. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund. After 2010, you can no longer get advance payments of the credit in your pay during the year as you could in 2010 and earlier years. This is because the law has changed. However, if you are eligible, you will still be able to claim the credit on your 2015 return. EIC is a refundable tax credit meaning you could qualify for a tax refund even if you did not have federal income tax withheld. To claim the EIC, you must meet certain rules. These rules are summarized in Table 1. Table 1. Earned Income Credit in a Nutshell for 2015 First, you must meet all the rules in these columns. Chapter 1. Rules for Everyone Third, you must Second, you must meet all the rules in one of meet the rule in these columns, whichever applies. this column. Chapter 2. Chapter 3. Chapter 4. Rules If You Have a Rules If You Do Not Figuring and Qualifying Child Have a Qualifying Child Claiming the EIC 1. Your 2. You must have a valid adjusted gross Social Security Number. income (AGI) must be less than: 3. Have earned income from employment, self-employment • $47,747 or another source. ($53,267 for married filing jointly) 4. Cannot use the married, if you have three or filing separate filing status. more qualifying children, 5. You must be a U.S. citizen or resident alien all year, or a • $44,454 nonresident alien married to a ($49,974 for U.S. citizen or resident alien married filing jointly) and choose to file a joint if you have two return. qualifying children, 14. Your earned income must be less than: • $47,747 ($53,267 for married filing 11. You must have lived jointly) if you have in the United States more three or more than half of the year. qualifying 9. Your child must have a (Special rules for military children, valid Social Security personnel.) Number and meet the • $44,454 relationship, age, 12. You must be at least ($49,974 for residency, and joint return age 25 but under age married filing tests. 65. jointly) if you have two qualifying 10. Your qualifying child 13. You cannot be the children, cannot be used by more dependent of another 6. Cannot be the qualifying than one person to claim • $39,131 person. • $39,131 child of another person. the EIC. ($44,651 for ($44,651 for married filing jointly) married filing 7. You cannot file Form 2555 or if you have one jointly) if you have Form 2555-EZ (relating to qualifying child, or one qualifying foreign earned income). child, or • $14,820 8. Your investment income ($20,330 for • $14,820 must be $3,400 or less. married filing jointly) ($20,330 for if you do not have a married filing qualifying child. jointly) if you do not have a qualifying child. Tax Year 2015 maximum credit: $6,242 with three or more qualifying children $5,548 with two qualifying children $3,359 with one qualifying child $503 with no qualifying children For more information or to see if you qualify, go to www.irs.gov/eitc or call 1-800-829-3676 and request Publication 596, Earned Income Credit.