Since 1975, the Internal Revenue Service has allowed eligible taxpayers to claim the Earned Income Tax Credit (EITC). Congress enacted the EITC to help lower-income taxpayers reduce their taxable income. The maximum EITC is $464 as of 2011 for a single taxpayer without children. For taxpayers with children, the maximum EITC is $5,751. The IRS does not allow married taxpayers to claim the EITC if they file their taxes separately.
The IRS limits the EITC to married taxpayers filing joint tax returns, single taxpayers, head-of-household taxpayers and widows or widowers. The EITC is not available to married taxpayers who file their taxes jointly. Furthermore, to qualify for the credit, the IRS requires that taxpayers have earned income during the tax year, and taxpayers without any taxable income cannot claim the EITC. The federal tax laws impose a different set of qualification requirements for taxpayers without a qualifying child than those with at least one qualifying child.
Taxpayers who claim the EITC without qualifying children must have resided in the U.S. for more than six months. Married taxpayers must both have lived in the U.S. for over six months. Childless taxpayers must be between 25 and 64 years old and cannot qualify as dependents on other taxpayers' returns. Taxpayers with qualifying children are those with natural children or adopted children who are under 19. Additionally, qualifying children include siblings, stepchildren and their descendants. Qualifying children also include stepsiblings and their descendants. However, taxpayers with children who attend school full-time can claim them as qualifying children for the EITC if they are younger than 24. Children must live with their parents for over six months in the U.S.
The EITC is a phase-out credit, and taxpayers with higher incomes are not able to claim the EITC. For 2011, taxpayers with at least three qualifying children are eligible to receive the maximum EITC of $5,751. The minimum EITC is $464 for taxpayers without any qualifying children. The EITC phases out at $43,998. For single taxpayers with incomes between $40,964 and $43,998, they can claim the EITC if they have at least three qualifying children.
Earned Income Requirement
The IRS does not allow taxpayers to claim the EITC if they did not have taxable or earned income during the year from working. Earned wages include income earned by working for employers or self-employment income. Earned income includes wages, commissions, salaries, tips, long-term disability and union strike wages. Earned income does not include unemployment benefits, interest, Social Security, spousal support or child support.
- IRS.gov: Earned Income Tax Credit (EITC) Questions and Answers
- IRS.gov: Earned Income Tax Credit Rules for Everyone
- IRS.gov: Publication 17 (2010), Your Federal Income Tax
- IRS.gov: Publication 501 (2010), Exemptions, Standard Deduction, and Filing Information
- IRS.gov: Preview of 2011 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
- IRS.gov: EITC Home Page