What is Earned Income Tax Credit?

Earned income from employment

Earned Income Tax Credit, sometimes called EITC that is a tax credit to help you keep more of what you earned. To qualify, you must first meet certain basic requirements and then you must file a tax return to claim the credit. 

To qualify for EITC you must have earned income from employment, self-employment or another source. There are two ways to get earned income:  (1) You work for someone who pays you, and (2) You own or operate a business or a farm.   Taxable earned income also includes long-term disability benefits received prior to minimum retirement age.   You can elect to have your nontaxable combat pay included in earned income for EITC.  To claim the credit, your earned income and adjusted gross income must be within certain limits.

 long-term disability benefits

nontaxable combat pay

After you meet the income requirement, you need to meet certain basic rules.  For instance, you must either meet the rules for workers without a qualifying child or have a child that meets all the qualifying child rules for you and your spouse if you file a joint return.  For Tax Year 2013, the maximum credit for people with three or more qualifying children is $6,044.

It’s not too late to file your tax returns for 2011, 2012 and 2013 to claim the EITC if you were eligible, but you need to file a tax return to claim this credit. Find out how—documents you need, common errors to watch out for, the consequences of filing an EITC return with an error, how to get help preparing your return and more, please email us, we would be more than happy to help you.

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Source:  www.irs.gov.

Email:   Excellent-tax@gmx.com