The Earned Income Tax Credit

The Earned Income Tax Credit

Millions of Americans forfeit critical tax relief each year by failing to claim the Earned Income Tax Credit, a federal tax credit for low-to-moderate income individuals who work. Taxpayers who qualify and claim the credit could owe less federal tax, owe no tax or even receive a refund.

This year it's even easier to determine whether you qualify for the EITC. The EITC Assistant, an interactive tool available on the IRS website, removes the guesswork from eligibility rules. Just answer a few simple questions about yourself, your children, your living situation and your income to find out if you qualify and estimate the amount of your EITC. You will see the results of your responses right away. Taxpayers, tax professionals, employers, community groups and public service organizations are encouraged to use the EITC assistant which is available in both English and Spanish.

Additionally, new for tax year 2009, is the added EITC and Income threshold for a THIRD qualifying child.

The EITC is based on the amount of your earned income and whether or not there are qualifying children in your household. If you have children, they must meet the relationship, age and residency requirements. Additionally, you must file a tax return to claim the credit.

If you were employed for at least part of 2009 and at least age 25, but under age 65, you may be eligible for the EITC based on these general requirements:

• You earned less than $13,440 ($18,440 if married filing jointly) and did not have any qualifying children.

• You earned less than $35,463 ($40,463 if married filing jointly) and have one qualifying child.

• You earned less than $40,295 ($45,295 if married filing jointly) with two or more qualifying children.

• You earned less than $43,279 ($48,279 if married filing jointly) with third or more qualifying children.

Tax Year 2009 maximum credit:

• $5,657 with three or more qualifying children.
• $5,028 with two or more qualifying children;
• $3,043 with one Qualifying child;
• $457 with no qualifying children.

Note: Your investment income must be $3,100 or less for the year.

Note: The 2009 maximum Advanced Earned Income Tax Credit (AEITC) the employer is allowed to provide each of their employees is $1,826 per year.

Please call us for more information about the EITC, or see IRS Publication 596, Earned Income Credit, which contains eligibility criteria and instructions for claiming the tax credit.