Unfortunately, every tax year 20% of Americans who are eligible for the Earned Income Credit don’t claim it, which can mean a loss of $2,400 for those taxpayers. It’s simple to determine your eligibility, so there’s no reason you shouldn’t claim the credit if you can. If you have qualifying children, the income threshold goes as high as $53,267, which can net you a refund of up to $6,242. Even without children, a married couple filing jointly may be eligible for a credit up to $503.
How to Qualify
You have to meet the following qualifications in order to claim the Earned Income Tax Credit:
- Citizen: You are a U.S. citizen with a valid Social Security Number or were a full year esident alien.
- Income: You must have earned your income through self-employment or through another employer.
- Investment income: You cannot have more than $3,400 in investment income.
- Dependent: You cannot be listed as a qualifying child on another’s tax return in which they claim the EITC.
- Filing status: You can’t file separately with your spouse. If you are married, you must file jointly.
- Forms: You are not able to file Forms 2555 or 2555-EZ, Foreign Earned Income.
Spouses who file together, without any qualifying children may still meet the requirements to claim the EITC if:
- Both parties lived in the U.S. for six or more months throughout the tax year.
- Both parties are between the ages of 25 and 65.
- Are not claimed as a dependent on anyone else’s tax return.
A child must meet the following in order to be deemed a “qualifying child” in reference to the EITC:
- Relationship: The child must be a son, daughter, adopted child, stepchild, authorized foster child, brother, sister, half-sibling, or a descendent of a sibling, such as niece or nephew.
- Age: The child must be 19 years old or younger at the end of the tax year, as well as younger than the taxpayer who is claiming the EITC. Full time students under the age of 24 also qualify.
- Disability: Children who are permanently or totally disabled may qualify for an exception to the age limitations
- Residency: The child is required to live with the taxpayer who claims the EITC for at least six months of the tax years. Special exceptions apply to active duty military personally stationed outside of the U.S.
- Tax Return: The child cannot have filed a joint return with their spouse, unless the return was only filed to claim a refund.