What are the specific requirements that a Taxpayer needs to satisfy in order to become eligible for the The Earned Income Tax Credit?
The Earned Income Tax Credit (EITC) is an important tax benefit to working families. But, according to the IRS “ less than 20% of the eligible taxpayers failed to claim it”. But due to the current poor economic situation, more taxpayers may be eligible for the EITC especially if they have reduced income or have lost their jobs. According to the IRS, the following specific factors are required to qualify for the earned income tax credit, as shown below;
1. “The amount of qualifying income depends on the taxpayer’s income. For married workers, who earned $49,078 or less from wages, self-employment or farm income last year, are filing jointly, and have two qualifying children, could be eligible. The maximum credit for 2011 tax returns is $5,751 for workers with three or more qualifying children."
2. Eligibility for the EITC is determined based upon a number of factors including earnings, filing status and eligible children.
3. However, Working Taxpayer’s without qualifying children may be eligible for only a smaller credit amount.
4. The taxpayers must file a tax return, even if he or she do not have a filing requirement, and specifically claim the credit.