You can retain a professional tax preparer to help you file the return and claim the credit. While you may need to pay this professional, they often will take their fee from the tax credit that you ultimately receive.
In many cases, people who are eligible for the earned income tax credit can get free assistance with preparing their taxes from the IRS Volunteer Income Tax Assistance program. The limits depend on how many qualifying children you have, as well as whether you are filing individually or jointly with a spouse. Separate limits apply to taxpayers with no qualifying children, with one qualifying child, with two qualifying children, and with three or more qualifying children.
The IRS changes each set of limits each year. A qualifying child can be any biological child, adopted child, stepchild, or foster child. This definition also can include a grandchild, a sibling, a half-sibling, a stepsibling, a niece or nephew, or any other descendant of a biological child, adopted child, stepchild, or foster child.
The qualifying child must be no older than 18, or no older than 23 if they are a full-time student. They must spend at least half of the year living with you. Income for the purposes of this credit includes not only income earned form a job but also unemployment benefits, taxable Social Security benefits, investment income, retirement benefits, and any alimony from an ex-spouse.
It does not include most forms of public benefits, such as Medicaid, Supplemental Security Income, or food stamps. You will not qualify for the earned income tax credit if you earn more than a certain amount from investments. Similar to income limits, the size of the credit depends on whether you have no, one, two, or three or more qualifying children. A taxpayer who does not owe any taxes will receive the full amount of the applicable credit.
If a taxpayer owes some taxes, they will receive the amount of the credit that remains after taking their tax obligation into account. You also may be able to have your employer prepay your credit through your paychecks in a process known as negative withholding.
If you are unsure whether you qualify for the earned income tax credit, you may want to look up the current eligibility requirements online.
Feel confident doing your own taxes. Just answer simple questions about your life, and TurboTax Free Edition will take care of the rest. For Simple Tax Returns Only. Earned Income Credit. Birth of a Child. Claiming the Foreign Tax Credit with Form What is the IRS Form ? Estimate your tax refund and where you stand Get started.
See if you qualify for a third stimulus check and how much you can expect Get started. Easily calculate your tax rate to make smart financial decisions Get started. Estimate your self-employment tax and eliminate any surprises Get started. Know what dependents credits and deductions you can claim Get started. Know what tax documents you'll need upfront Get started. Learn what education credits and deductions you qualify for and claim them on your tax return Get started. The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice.
The credit offsets taxes, supplements very low wages, and encourages work. None One Two Three or More. Choose the option that best describes your household by marital status and number of children. All information on this site is provided for educational purposes only and does not constitute legal or tax advice.
Please seek a tax professional for personal tax advice. If you qualify, the tax credit lowers the amount of taxes you are required to pay. It is refundable, which means that if the credit is worth more than you owe, you get the rest of the money back in your tax refund.
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