The Earned Income Tax Credit provides a tax credit and/or refund to people who earn low to moderate wages. The payment is received as part of the end-of-year tax filing period.
Workers who qualify for the federal EITC also qualify for a state EITC which is currently 12.5% of the federal amount and will increase to 15% in tax year 2017.
For tax year 2016:
- Workers who were raising one child in their home and had family income of less than $39,296 (or $44,846 for married workers) can get an EITC of up to $3,373.
- Workers who were raising two children in their home and had family income of less than $44,648 (or $50,198 for married workers) can get an EITC of up to $5,572.
- Workers who were raising three or more children in their home and had family income of less than $47,955 (or $53,505 for married workers) can get an EITC of up to $6,269.
- Workers between the ages of 25 and 64, who were not raising children in their home, and had income below $14,880 ($20,430 if married and filing jointly), can get an EITC of up to $506.
- Qualifying children include: sons, daughters, stepchildren, grandchildren as long as they lived with the taxpayer for more than half the year. Nieces, nephews, children of a friend or foster children can be qualifying children if they lived with the taxpayer all year and were cared for as members of the family. Qualifying children must be under age 19 or under age 24 if they are full-time students. Disabled children of any age are considered “qualifying children.”
- Immigrants who are “resident aliens for tax purposes” can get the EITC. This means the immigrant must be a lawful permanent resident or have lived in the U.S. for at least six months. Immigrants who are not permanent residents can qualify if they and their family members have legal work authorization and have a status including the following: refugee, asylee, Temporary Protected Status, Deferred Enforced Departure or applicant for asylum.
How to Apply
The worker who has children files a Form 1040 or 1040A and fills out the Schedule EIC (You cannot file the 1040EZ). The worker who was not raising children can file any tax form (including the 1040EZ). You will need to fill out the Schedule EIC in addition to a regular tax return.