Millions of Americans forfeit critical tax relief each year by failing to claim the Earned Income Tax Credit, a federal tax credit for low-to-moderate-income individuals who work. Taxpayers who qualify and claim the credit could owe less federal tax, owe no tax, or even receive a refund.
This year it’s even easier to determine whether you qualify for the EITC. The EITC Assistant, an interactive tool available on the IRS website, removes the guesswork from eligibility rules. Just answer a few simple questions about yourself, your children, your living situation, and your income to find out if you qualify and estimate the amount of your EITC. You will see the results of your responses right away. Taxpayers, tax professionals, employers, community groups, and public service organizations are encouraged to use the EITC Assistant, which is available in both English and Spanish.
The EITC is based on the amount of your earned income and whether or not there are qualifying children in your household. If you have children, they must meet the relationship, age, and residency requirements. Additionally, you must file a tax return to claim the credit.
General requirements: If you were employed for at least part of 2010 and are at least age 25, but under age 65, you may be eligible for the EITC based on these general requirements:
- You earned less than $13,460 ($18,470 if married filing jointly) and did not have any qualifying children.
- You earned less than $35,535 ($40,545 if married filing jointly) and have one qualifying child.
- You earned less than $40,363 ($45,373 if married filing jointly) with two or more qualifying children.
- You earned less than $43,352 ($48,362 if married filing jointly) with three or more qualifying children.
Tax Year 2010 Maximum Credit
- $5,666 with three or more qualifying children
- $5,036 with two or more qualifying children
- $3,050 with one qualifying child
- $457 with no qualifying children
Note: The American Recovery and Reinvestment Act (ARRA) provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009 and 2010 tax years.
Note: The 2010 maximum Advanced Earned Income Tax Credit (AEITC) the employer is allowed to provide each of their employees is $1,830 per year.
© 2010, Bruce Mc. All rights reserved.
