Earned Income Tax Credit: Do You Qualify?

The Earned Income Tax Credit is for lower income working individuals . It is a credit to reduce the taxes you owe and may even get you a refund!
To claim EITC on your tax return, you must meet all the following rules:

1. You must have a valid Social Security Number  
• This includes your spouse (if you file a joint return), and any others listed on Schedule EIC
2. You must have earned income
• from working for someone else or running or operating a farm or business  
3. Your investment income cannot exceed $3,150 (2011)
4. You cannot be married filing separately (unless you have been separated for 6 months)
5. You must be a US citizen or LPR* (lawful permanent resident) (aka resident alien) all year
• or non-resident alien married to a U.S. citizen or resident alien and filing a joint return. 
6. You cannot be a qualifying child of another person 
7. You cannot file Form 2555 or Form 2555 EZ. (Related to foreign earn income) 
8. You must meet EITC Income Limits, Maximum Credit Amounts and Tax Law Updates

* LPR is used to indicate a legal permanent resident.  A lawful permanent resident of the United States, also known as a green card holder, is a foreign-born citizen who has achieved residency of the United States. This means that she is allowed to live and work in the United States in the same way a U.S. citizen would be allowed to.

And you must meet one of the following:

1. Have a qualifying child (see who is a qualifying child below), or 
2. If you do not have a qualifying child, you must:
1. be age 25 but under 65 at the end of the year, 
2. live in the United States for more than half the year, and 
3. not qualify as a dependent of another person. 

If you qualify for EITC, you have to file a tax return with the IRS, even if you owe no tax or are not required to file.
EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
2011 tax year income limits, maximum EITC amount and the EITC-related tax law changes. You can also access the information for:
Preview of 2012 Tax Year
2011 Tax Year

2010 Tax Year
2009 Tax Year
2008 Tax Year
Summary 2011 Tax Year:  
Earned Income and adjusted gross income (AGI) must each be less than:
$43,998 ($49,078 married filing jointly) with three or more qualifying children
$40,964 ($46,044 married filing jointly) with two qualifying children
$36,052 ($41,132 married filing jointly) with one qualifying child
$13,660 ($18,740 married filing jointly) with no qualifying children
Tax Year 2011 maximum credit:
$5,751 with three or more qualifying children
$5,112 with two qualifying children
$3,094 with one qualifying child
$464 with no qualifying children
Investment income must be $3,150 or less for the year.
Source: irs.gov
If you think you qualify for EITC, contact us for a FREE confidential consultation regarding your options, please call Stephen B. Jordan EA at 603.893.9336 or go to our website Stephen B Jordan EA

You may also contact your local VITA site for Free Tax Return Preparation for You by Volunteers or call the IRS (800) 829-1040 for more information.