1. What is the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) is a refundable tax credit for low- to moderate-income working individuals and families. The credit reduces the amount of tax owed and may result in a refund.

2. How Does EITC Work?

The EITC amount depends on your income, filing status, and number of qualifying children. The credit increases with earned income until it reaches a maximum amount, then gradually phases out.

3. Eligibility Requirements

Basic Requirements:

• Have earned income from employment or self-employment
• Meet certain income limits based on filing status and number of children
• Have a valid Social Security number
• Be a U.S. citizen or resident alien all year
• Not file Form 2555 (Foreign Earned Income)

4. Using the Calculator

Instructions: Select your filing status, enter your earned income, and specify the number of qualifying children. The calculator will provide an estimate of your EITC qualification.

5. Frequently Asked Questions (FAQ)

Q1: What counts as earned income for EITC?
A: Wages, salaries, tips, and net earnings from self-employment. Investment income, retirement income, and unemployment benefits do not count.

Q2: Who qualifies as a child for EITC?
A: The child must be your son, daughter, stepchild, foster child, brother, sister, or a descendant of any of these. They must meet age, relationship, and residency tests.

Q3: Can I claim EITC if I'm single with no children?
A: Yes, but the income limits are lower and the maximum credit amount is smaller compared to those with children.

Q4: Is EITC refundable?
A: Yes, EITC is refundable, meaning you can receive a refund even if you don't owe any tax.

Q5: Where can I get more information about EITC?
A: Visit the IRS website or consult Publication 596 for detailed information about the Earned Income Tax Credit.