Are you Eligible for the Earned Income Tax Credit?

IRS Tip #2 from Carpenter, Evert and Associates – The Earned Income Tax Credit

The earned income tax credit is a tax credit that assists low and middle income earners. Make sure you know if you qualify, since the tax credit can add a significant boost to your income. Learn more about other tax credits here.

Here are some things the IRS wants you to know about this important tax credit:

Review your eligibility. If you worked and earned under $51,567, you may be eligible for the earned income tax credit. If your financial or family situation has changed, you should review the eligibility rules. You might qualify for the earned income tax credit this year even if you didn’t in the past. Workers who qualify for the credit must file a federal income tax return and specifically claim the credit to get it, even if they do not have a requirement to file a return.

Know the rules. Before claiming the earned income tax credit, you need to understand the rules to be sure you qualify. It’s important to get the tax credit and get it right. There are several factors to consider:

  • Your filing status can’t be Married Filing Separately.
  • You must have a valid Social Security number for yourself, your spouse if married, and any qualifying child listed on your tax return.
  • You must have earned income. Earned income includes earnings such as wages, self-employment and farm income.
  • You may be married or single, with or without children to qualify. If you don’t have children, you must also meet age, residency and dependency rules.
  • If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.

Lower your tax or get a refund. The earned income tax credit reduces your federal tax and could result in a refund. If you qualify, the tax credit could be worth up to $6,044. The average tax credit was $2,355 last year.

Use free IRS services. Don’t guess about your earned income tax credit eligibility. Use the EITC Assistant tool  on the IRS website. The tool helps you find out if you qualify and will estimate the amount of your tax credit. Free brand-name software will figure your taxes and EITC for you. Combining e-file with direct deposit is the fastest and safest way to get your refund. Free File is available exclusively on Free help preparing and e-filing your return to claim your EITC is also available at thousands of Volunteer Income Tax Assistance sites around the country.

If you are a member of the U.S. Armed Forces serving in a combat zone, special rules apply.  For more information, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on or by calling 800-TAX-FORM (800-829-3676).

Carpenter, Evert and Associates Top Ten Tax Tips for 2014:

  1. How to Choose Professional Tax Services
  2. Are you Eligible for the Earned Income Tax Credit?
  3. Tax Return Information is Now at Your Fingertips  
  4. Don’t Miss Out on Important Tax Credits
  5. Tax Benefits for Parents
  6. How Will the Affordable Care Act Affect Your Taxes?
  7. Do you Know Your Tax Filing Status?
  8. What to Know About Declaring your Tips 
  9. Taxable and Nontaxable Income – What’s the Difference? 
  10. Tax Deductions for Charitable Contributions

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