Earned Income Credit Qualifications

The Earned Income Credit is a benefit for people with low to moderate income levels. It’s designed to help working families save money. The income level limits are scaled based on income and number of qualifying children. For instance, an unmarried individual with an income over $14,340 would not be able to claim the credit, but an unmarried individual with an income less than $37,870 and one qualifying child would be able to take the credit. The credits allow for a maximum of $6,044 for individuals or married couples with three or more qualifying children, to $487 for individuals with no children. Across all of the different types of dependent qualifications and income levels, the investment income must be less than $3,300.

Taxpayers must be mindful when applying for the Earned Income Credit. They must not be qualifying as a dependent on someone else’s return. They must file any type of foreign earned income tax return. They must have a qualifying dependent or else be over 25 and under 65, have lived in the US for more than half a year. If you apply for the Earned Income Credit and are denied, you must also submit IRS Form 8862, in order for the IRS to reassess your situation.

What is a qualifying child according to the Earned Income Credit? The child must be below the age of 19, or under the age of 24 and enrolled full time in college. The child may also be considered disabled and be any age. Additionally, the “child” must be either a daughter, son, stepchild. Also, the child may be a sister or brother, half-sister or half-brother, or a stepsister or step brother. Or additionally the child may be a descendant of any of those like a grandchild or a nephew. Finally the IRS will check two more things before allowing the Earned Income Credit, whether the child lived with you and if the child appears on only your return, or if someone else claimed the child on their income tax return.

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