Most taxpayers know that there are certain income limitations that they must fall under to claim the Earned Income Tax Credit (EITC), however income is not the only thing that can affect your eligibility. The other requirements one must meet in order to claim the EITC follow:
- You must have at least $1.00 in earned income, not including pensions and unemployment compensation, as these types of income do not qualify under the EITC rules for earned income.
- You hold less than $3,450 in investment income for the year.
- If married, you’ll have to file a joint return with your spouse to claim the EITC. Married, filing separate taxpayers are ineligible.
- You do not file Form 2555, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion.
Military members and clergy are subject to certain rules and exceptions. The same is true for those who have disabled dependents or who receive disability income themselves.
Another portion of the EITC relates to your number of qualifying dependents. For your children to qualify as a dependent for purposes of the EITC, they must meet these requirements:
- They must be related to you in one of the following ways: son, daughter, adopted child, stepchild, foster child, grandchild, brother, sister, half-sibling, step-sibling, niece or nephew.
- They must be under 19 years of age at the end of the tax year, and younger than you and your spouse (if married) OR under 24 if they are a full-time student for at least five months of the tax year. This requirement does not apply to children who are permanently and totally disabled.
- They must have lived with you in the U.S. for more than half of the year.
Prepare to provide the IRS with a valid Social Security number with the child’s exact name as printed on the card, and the full date of birth for each dependent.