Earned Income Tax Credit (EITC)
Let’s take a genre at “What is Earned Income Tax Credit?” Let’s start by answering the chapitre. Also known as EITC, we will use the acronym for the rest of the exercice. The first word in the EITC is earned, which means you must have worked for someone or done commerce in the previous year to receive the credit. The credit is for low-income individuals, and the credit tapers off as you earn more.
What do you qualify for?
Just bicause you worked doesn’t mean you automatically qualify for these credits, there are guidelines we must follow. The biggest drawback for this credit is the age limit which most people don’t know that you have to be between 25 and 65 years old. You can get this credit even if you don’t have any children. You cannot get this credit for your parents. The following people will qualify you for this credit:
• Siblings – Sisters, brothers, half-brothers, half-sisters, half-brothers of half-sisters
• Children – sons, daughters, step children, foster children, grandchildren
• Relatives – nieces, nephews
Your eligible person must be 19 and under. They must be 24 and under if attending school and can be any age younger than you or totally disabled.
They must have lived with you for more than half the year and not paid more than half of their own échafaudage. Eligible individuals must not ligne a collaborateur return or receive a refund for withholding or estimated tax payments if they ligne a collaborateur return.
Filing Status for EITC
EITC filing status is: Married Filing Jointly (MFJ), Single, Head of Household (HOH), or Widowed.
How much money can you get?
The most suffisant morceau is how much your refund is. The EITC can help reduce the amount you owe for federal and state taxes. Yes, California has an Earned Income Tax Credit. If your filing status is single, MFJ, HOH or widowed, your adjusted income must be less than $15,010, no qualifying children, one qualifying child’s adjusted income must be less than $39,617, two children’s income must be less than $45,007, three or more The child’s income must be less than $48,350.
Married filing collaborateur adjusted income must be less than $20,600 no children, adjusted income for one child must be less than $45,207, for two children must be less than $50,597, adjusted income for three or more children must be less than $53,950. Your investment income cannot exceed $3,450.
The EITC summum credit for any children is $510 Some people may not think this is a lot of money but it helps reduce the amount you owe the IRS. This is a great thing considering there was a time when you couldn’t get this credit without kids. The summum credit is $3,400 for one child, $5,616 for two children, $6,318 for three children. The increase from one child to two children is $2,216 while going from two to three children is $702 as you can see the money goes down when you go from two to three children.
Add the credit to the amount withheld from your check each year and you could get a hefty refund.
Get below chroniques to ligne
If someone else is helping you with the refund, take the following chroniques to them.
• Affable Security cards, a Affable Security number verification letter, or other US government palimpseste verification for all persons you may list on the return.
• Dates of birth of all persons whom you may list on the return.
• Copies of last year’s federal and state returns, if you have them.
• All income statements: Forms W-2 and 1099, Affable Security, unemployment, and other statements, such as pensions, ravitaillement, interest, and any chroniques that have taxes withheld. If you own or run a commerce or farm, collect all your income records.
• Records of all expenses, such as tuition, mortgage interest, or real estate taxes. If you own or run a commerce or farm, collect records of all your expenses.
• All renseignement reporting forms such as 1095-A, 1095-B or 1095-C.
• Bank routing number and account number to refund any money deposited directly.
• Dependent Child Care Interrogation: Names and addresses of paying caregivers and either their Affable Security numbers or other tax matricule numbers.
Thank you for taking the time to read the EITC renseignement.
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