Earned Income Tax Credit: Do You Qualify?

With the economy down and household income lower, you may find you qualify for the Earned Income Tax Credit (EITC) this year, even if you never met the criteria in the past.If you file single, married (jointly or separately), head of household, or qualifying widow(er) and your income from employment, self-employment, or farm income is $49,078 or below you may qualify for up to $5,751 in credit. People with larger families and more household expenses will receive more credit, but every little bit helps!The IRS offers an interactive assistant to help you determine whether you’re eligible for the tax credit, and how much credit you can hope to get. It takes roughly five minutes to find out, but you’ll be logged out if you’re inactive for five minutes, so be prepared! You’ll need to know the amounts and types of income received to determine how much credit can be yours, including from your W-2, business, alimony, interest and dividends. Then, be prepared to enter any deductions you may have, such as student loan interest, moving expenses, or self-employment tax.The adjusted gross income (AGI) of a single person with no dependents must be below $13,660 to qualify for the credit. This amount increases to $18,740 if you’re married, filing jointly, and have no children. With just one dependent child, the maximum AGI increases significantly: $36,052 if you’re single ($41,132 for married, filing jointly). To be eligible for the maximum credit, though, you’ll need to have three or more children.If you qualify for the EITC you probably won’t need a CPA to help you with your taxes. Instead, check out the IRS’ list of free tax preparation services. Let us know if we can help: Office@CPAsite.com or (904) 396-5400.