The Earned Income Tax Credit
(EITC)
“A tax credit for people who work,
but don’t earn high incomes”
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EITC is a Refundable Tax Credit
• It was enacted in 1975 to offset families’
Social Security payroll tax withholding
• Workers who don’t earn enough to owe
income tax can still get a refund
• Today it supplements the earnings of workers
with lower wages
• Available to families and individuals who work
but earn low to moderate income
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Who May Qualify?
All taxpayers claiming the EITC:
• Must have a valid social security
number
• Must not file as “married filing
separately”
• Must not file form 2555 or 2555-EZ
• Must meet the investment income
limitation
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Who May Qualify (Cont’d)
All taxpayers claiming the EITC:
• Must have earned income
• Cannot be the qualifying child of
another person
• Generally, must be a U.S citizen or
resident alien for the entire year
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Definition of Qualifying Child
Relationship:
• Son, daughter, grandchild, stepchild, adopted child,
brother, sister, stepbrother, stepsister, (or their
descendents) or foster child placed by a government
or private agency
Residence:
• Must live with worker in the U.S. for more than half
the year
Age:
• Under 19 or 24 if full time student or any age if
totally and permanently disabled
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How Much is the EITC Worth?
• $6,044-Workers raising three or more
qualifying children who earned less
than $46,227 ($51,567 married filing
jointly)
• $5,372-Workers raising two qualifying
children who earned less than $43,038
($48,378 married filing jointly)
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How Much is EITC Worth?
(cont’d)
• $3,250- Workers raising one qualifying
child who earned less than $37,870
($43,210 married filing jointly)
• $487-Workers with no qualifying
children who earned less than $14,340
(19,680 married filing joint) with no
qualifying children
• 2013 Investment income must be less
than $3,300
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Claiming the EITC
Eligible taxpayers must:
• File a tax return
• Complete and attach Schedule EIC
(if claiming a qualifying child) to the
return
• Complete a worksheet to figure the
credit
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Common EITC filing errors
• Claiming a child who is not an
EITC qualifying child
• Incorrect filing status
• Incorrect amounts
• Incorrect Social Security Number
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Disallowed EITC claims
Taxpayers filing misleading claims:
• Must recertify
• May be disallowed from taking
the credit
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EITC Assistance & Products for
Taxpayers
• Form 1040,1040A,1040EZ instructions
• www.irs.gov/eitc all services including the EITC tax
trails, EITC assistant and electronic qualification check
list
• Publication 17, Individual Income Guide
• Publication 596, Earned Income Tax Credit
• Publication 3311M, EITC Q & A’s
• 1-800-839-1040 for tax questions
• 1-800-839-3676 for tax products (forms request for
taxpayers)
• 1-800-839-4477 for pre-recorded information
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EITC Assistance and Resources
Internal Revenue Service (IRS)
• 1-800-839-1040
• www.irs.gov/eitc
• www.irs.gov
• www.aarp.org
New Jersey Community Resource
New Jersey Division of Taxation
• 1-888-895-9179
• www.njtaxation.org
New Jersey Helps
• www.njhelps.org
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Free Tax Preparation is Available
Volunteer Income Tax Assistance (VITA)
and AARP sites throughout the state
• Community volunteers are trained
and IRS certified.
• Sites are sponsored by community
groups, churches, banks, and nonprofits.
• Free electronic filing available.
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Questions ?
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