According to John Koskinen IRS Commissioner, 1/3 of those eligible for EITC changes yearly as their personal situations change. He wants those who qualify for EITC, especially for the first time, to have all the info they require to receive the EITC and get it correct.
The EITC will vary according to income, size of family and filing status. The interactive EITC Assistant has been upgraded by the IRS and it will help tax payers to determine if they are eligible and will also calculate the estimated EITC refund based on your answers at time of filing.
Details can be found at www.irs.gov/eitc. Over 27 million workers and families who were eligible received an average EITC refund of $2,300 which totaled over $63 Billion.
Employees, farmers and the self-employed whose income was less than $51,567 last year can get bigger refunds should they qualify for EITC. It could mean an extra $487 in EITC for those without children and a maximum refund of $6,044 for people who have 3 or more children that qualify.
EITC is refundable, unlike the majority of their credits and deductions. Those eligible may still get the IRS refund, even if they do not owe taxes.
Earned Income Tax Credit Income Limits and Maximum Credit Amounts
Earned Income and adjusted gross income (AGI) for those married and filing jointly have to be less than:
- $46,227 ($51,567) with 3 or more qualifying children
- $43,038 ($48,378) with 2 qualifying children
- $37,870 ($43,210) with 1 qualifying child
- $14,340 ($19,680) with no qualifying children
Maximum credit for tax year:
- $6,044 with 3 or more qualifying children
- $5,372 with 2 qualifying children
- $3,250 with 1 qualifying child
- $487 with no qualifying children
Investment income has to be under $3,300 for the year.
How to Claim the EITC Credit
In order to receive the EITC, you have to file an income tax return, even when they are not required to file, and specifically claim the credit.
Note: The IRS reminds taxpayers that although the majority of refunds are dispensed within 21 days, various issues can impact the length of time it requires to send out a certain refund. Some returns need further evaluation, resulting in it taking more time to process any relevant refunds. Taxpayers can monitor the status of their refund with the “Where’s My Refund?” checker offered on IRS.gov.
Get It Right: Avoid Errors
Taxpayers are solely responsible for the exactness of their tax return no matter who prepares it. The guidelines for EITC are complex. The IRS urges taxpayers to request assistance should they be uncertain of their eligibility.
Avoid these common EITC mistakes:
- Claiming a child/children who fail to satisfy the relationship, age or residency checks
- Even though married, filing as “single” or “head of household”
- Over or under reporting income and or expenses in order to qualify for or maximize EITC
- Social Security numbers that are missing or that the last name mismatches for both taxpayers and the children
- Taxpayers need to promptly reply to any request from the IRS requiring further information about EITC.
Look Out For Scams
EITC delivers a monetary boost for numerous hard-working US citizens. Nevertheless, an intentional mistake will have a long term effect on future eligibility to claim EITC. Look out for frauds that promise to maximize the EITC refund.
Scams that generate fictitious qualifying children or dependants or increase earnings amounts to acquire the highest EITC might leave taxpayers with a penalty. Should an EITC claim be decreased or rejected after tax year 1996 for any purpose besides a mathematical or clerical problem, taxpayers have to file Form 8862, Information to claim earned income credit after disallowance, with their subsequent return to claim the credit.
Filing Your Taxes with H&R Block
Remember, when you file your taxes with H & R Block Online, you don’t need to know which schedules to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate forms.
You’ll get step-by-step instructions through your taxes, expert help when you need it and every deduction and credit that applies to you. We make sure you get the biggest refund possible. Try the Free tax refund calculator to see your how much money you’ll be getting back.