The Earned Income Tax Credit (EITC) is a federal income tax credit for low-income workers who are eligible for and claim the credit. A tax credit is a dollar-for-dollar reduction in taxes owed. Some credits are refundable -
taxes could be reduced to the point that an individual would receive a refund instead of owing any taxes.
The EITC is money for people who work but don't earn enough,and could use the EITC to put food on the table, move into better housing, invest in education, transportation, or to save for the future.
Do You Qualify?
The maximum amount of income you can earn
and still get the credit has increased in 2008.
The maximum Earned Income Tax Credit (EITC)
for 2008 is $4,824. To claim the EITC, taxpayers
must meet the following rules:
§ Must have earned income from employment or self-employment
§ Must have a valid Social Security Number
§ Filing status CANNOT be ‘married filing separately"
§ 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
§ Cannot be a qualifying child of another person
§ If you do not have a qualifying child of another person you must be age 25 but under 65 at the end of the year; live in the United States for more than half the year, and not qualify as a dependant of another person
§ Cannot file Form 2555 or 2555-EZ (related to foreign earned income)
Did you meet the rules? If so, your earned income must be less than:
§ $12,880 ($15,880 if married filing jointly) with no qualifying child
§ $33,995 ($36,995 if married filing jointly) with one qualifying child
§ $38,646 ($41,646 if married filing jointly) with more than one qualifying child
§ Special rules may apply for members of the U.S. Armed Forces and taxpayers in designated disaster areas
Do you have children?
To be a qualifying child for the credit:
§ The child must meet the relationship, age and
residency tests described at www.irs.gov/eitc or
in Publication 596 - Earned Income Tax Credit
The EITC has no effect on certain welfare benefits. In most cases, EITC payments will not be used to determine eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most
Temporary Assistance for Needy Families (TANF) payments.
