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Earned Income Credit for 2015, 2016

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Earned Income Tax CreditThe Earned Income Credit is for people who work and have a moderate to low income. You can claim the tax credit and receive up to $6044.00 for three qualifying children.

What you need to qualify

  • You must have a Social Security number
  • You must have earned income form being self employed or as an employee
  • Your filing status cannot be married, filing separately
  • You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen, or resident alien and filing a joint return
  • You cannot be a qualifying child of another person

If you do not have a qualifying child you must:

  • Be age 25 but under age 65 at the end of the year
  • Live in the United States for more than half of the year
  • Not qualify as the dependent of another person
  • Cannot file Form 2555 or Form 2555-EZ (related to foreign earned income)
  • You must meet EITC income limits, Maximum Credit Amounts and Tax Law Updates

EIC Tax Credit Table

Dependents     Maximum Credit    Adjusted Gross Income

0                      $487.00                 $14,340.00 (Jointly $19,680.00)

1                      $3,250.00              $37,870.00 (Jointly $43,210.00)

2                      $5,372.00              $43,038.00 (Jointly $48,378.00)

3+                    $6044.00               $46,227.00 (Jointly $51,567.00)

EITC Worksheet

The EIC worksheet can be found in the instructions for the 1040, 1040A, and 1040EZ tax forms. You can take a look at the information, and you will quickly realize how a tax software program will make this process much easier for you.

Your EIC worksheet can be filled out for you by using TurboTax Online. You can have confidence your worksheet is prepared accurately knowing your information is placed into the correct box. You have the risk of losing quite a bit of money if you fill this out incorrectly.

A child must pass these 3 tests

  1. Relationship
  2. Age
  3. Residency / Joint Return

For your child to qualify in the relationship category for the tax credit your child must be your:

1) Son, daughter, stepchild, eligible foster child, adopted child or a descendant of any of them like your grandchild.

2) Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them like your niece or nephew.

3) Adopted children are no different than biological children and foster children have to be placed with you by an authorized placement agency, or by judgement, decree, or other order of any court of competent jurisdfiction.

For your child to qualify in the age category for the tax credit your child must be:

1) Your child must be under the age of 19 at the end of the year and your child must be younger than you or your spouse if you file a joint return.

2) Your child must be a full time student under the age of 24 at the end of the year and younger than you or your spouse if you file a joint return.

3) Finally if your child is permanently and totally disabled at any time of the year, regardless of age.

For your child to qualify in the residency category for the credit your child must have:

1) Your child must have lived with you for more than half of the year in the United States.

How to Claim the Credit

TurboTax will walk you through the entire process of claiming the earned income credit and will help you get the biggest tax refund possible.