EIC – What Is Needed And Who Can Claim It?

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The EIC is the common name for “Earned Income Tax Credit” or EITC. This is a tax benefit for working people who earn a moderate or low income. The credit amount under EIC depends upon the amount earned and the filing status. The qualifying person will be permitted to pay less federal tax or get a tax refund.

Who Qualifies For EIC?

To qualify for EIC for 2015 tax returns you would need among others to fall under the following criteria:

• • You must have earned an income through either self-employment or employment;
  • You must be either a citizen of the USA or resident for one whole year;
  • Your income from any investment cannot exceed $3,400 through the whole of 2014;
  • You cannot file under MFS (married filing separately);
  • You must have a SSN (Social Security Number). The dependants (children) too, should have a SSN. ITIN (Individual Taxpayer Identification Numbers) do not count).
  • The earned income and AGI (adjusted gross income) should not exceed:

– $20,330 (married filing jointly) or $14,820 (individual) – where you have no qualifying children
– $44,651 (MFJ) or $39,131 (ind.) – where you have 1 qualifying child
– $49,974 (MFJ) or $44,454 (ind.) – where you have 2 qualifying children
– $53,267 (MFJ) or $47,747 (ind.) – where you have 3 or more children

It is important to note that the Government has rules to recognize same-sex marriages and hence, treat such individuals as “married” under the federal law for tax purposes. These tax purposes would include among others, child tax credit, claim for EIC, contribution to IRA, employee benefits, standard deductions, claims for dependency exemptions, and return filing status.

The maximum credit you can claim is:

• $503 where you have no qualifying children;
• $3,359 where you have 1 qualifying child;
• $5,548 where you have 2 qualifying children;
• $6,242 where you have 3 or more qualifying children.

For more details on rules regarding qualifying child visit here

What Are The Documents You Need For EIC?

When you apply for EIC you need to be prepared with the right documentation. Here is a list of the documents you need to have at the time of filing your returns to be considered for the EIC:

• SSN (Social Security Number) verification letter/ SSN Cards/ valid government document that confirms verification of the persons listed on the returns;
• Birth dates of the persons entered in the returns;
• Copy of the returns – both state and federal;
• Records of your income, i.e. stocks, pension, unemployment, social security, Forms 1099 an W2.
• Records of expenses incurred, i.e. estate taxes, mortgage interest, tuition fees, etc. For self-employment, records of expenses will be required.
• Your bank account’s routing numbers for any tax refund.
• Information about the childcare, i.e. name of the caretaker and SSN (tax identification number) and address.
• Signature of both spouses.

For more information, check the details given on the IRS website