EITC, the Earned Income Tax Credit, also known as EIC is a tax credit for low income taxpayers. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work.
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To claim the EITC on your tax return, you must meet all of the following rules:
- Must have a valid Social Security Number
- You must have earned income from employment or from self-employment.
- Your filing status cannot be Married Filing Separately (MFS)
- You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
- You cannot be a qualifying child of another person.
If you do not have a qualifying child, you must:
- be age 25 but under 65 at the end of the year,
- live in the United States for more than half the year, and
- not qualify as a dependent of another person
- Cannot file Form 2555 or 2555-EZ (related to foreign earn income)
You must meet these EITC Income Limits in order to qualify for the EIC Credit. The maximum EIC amount for taxpayer is $503 for tax year 2015. For taxpayer with 1 child, the maximum EIC amount is $3,359. For taxpayer with 2 children, the maximum EIC amount is $5,548. For 3 or more children, the maximum EIC credit is $5,242 for tax year 2015 (Filing in 2016).