The Earned Income Tax Credit (EITC) is a credit available to certain people who work and have earned income below a specified amount. The EITC is a tax credit, which means it will put more money in your pocket. It can either reduce the amount of taxes you owe or in some instances it can give you a refund.
For the 2006 tax year, to qualify for the EITC you must have worked and earned income less than:
|
Number of Qualifying Children
|
Single
|
Married Filing Jointly
|
|
0
|
$12,120
|
$14,120
|
|
1
|
$32,001
|
$34,001
|
|
> 1
|
$36,348
|
$36,348
|
To qualify for the EITC on your income tax return you must meet all of the following rules setup by the IRS:
- You must be an U.S. citizen or resident alien for the entire tax year, or be a nonresident alien married to an U.S. citizen or a resident alien and filing a joint return.
- You must have a valid social security number.
- You must have earned some income from either employment or self-employment.
- Your filing status cannot be married, filing separately.
- You cannot be a qualifying child on another taxpayer’s return.
- You cannot file Form 2555 or 2555-EX.
- If you do not have a qualifying child (see below) you must be 1) between the ages of 25 and 65, 2) live in the United States for more then half the year, and 3) not qualify to be a dependent of another taxpayer.
According to the IRS, if your child meets the following three tests they are determined to be a "qualifying child" under the EITC.