What is the Earned Income Tax Credit and can I claim it on my return?
The earned income credit (EITC) is a refundable tax credit for certain people who work and have earned income. The earned income tax credit calculation is auto-calculated by the software if you select to have your EITC benefit calculated. The earned income tax credit is calculation is based on several items included dependent child children and earned income – such as W2 and 1099 income. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund.
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Earned income and adjusted gross income (AGI) must each be less than:
- $43,352 ($48,362 married filing jointly) with three or more qualifying children;
- $40,363 ($45,373 married filing jointly) with two qualifying children;
- $35,535 ($40,545 married filing jointly) with one qualifying child;
- $13,460 ($18,470 married filing jointly) with no qualifying children.
Tax Year 2010 maximum credit:
- $5,666 with three or more qualifying children;
- $5,036 with two qualifying children;
- $3,050 with one qualifying child;
- $457 with no qualifying children
- Investment income must be $3,100 or less for the year.
The maximum Advance Earned Income Tax Credit (advance EITC) for TY 2010 the employer is allowed to provide throughout the year with the employee’s pay is $1,830.