Many Americans don’t know if they are entitled to tax credit and why. Unknowingly, those who don’t know about their tax credits miss an opportunity to reduce their tax amount or, in some cases, increase a tax refund. One such tax credit for families with moderate or low income is Earned Income Tax Credit or EITC. EITC is also refundable, meaning that if your payable tax is zero, you can refund the EITC amount. It surely is great to receive money from the IRS rather than paying it.
Basic Eligibility Criteria For Earned Income Tax Credit in Burlinton, VT
Taxpayers who file tax returns individually or married jointly are eligible for EITC. It basically means that you must have filing status in the US either as a US citizen or as a resident alien.
In the case of married taxpayers, all members of the family must have a valid Social Security Number, i.e., the taxpayer himself, the spouse, and every qualifying child have a valid SSN.
The age of the qualifying taxpayer must be between 25 and 65.
You must present proof of earning either as an employee or as a self-employed.
Although the above-mentioned criteria are enough to know whether you are eligible for EITC or not, some points need further explanation to know for sure. Like the valid Social Security number is the one that is valid for employment and is issued before the due date of filing tax returns. SSN is acceptable for EITC if “Valid for work with DHS authorization” is written on Social Security cards.
Another important point regarding eligibility for EITC is that the taxpayers that are married but file their returns separately aren’t eligible for EITC. It is important to mention here that you can claim to be Head of Household even if you are not married but more than half the cost of living while living with a qualifying child.
Further Qualifying Rules For Earned Income Tax Credit In Burlington, VT:
You need to have paid more than half of the total cost to keep up a home during the tax year that you are claiming the credit for. Costs included for household expenses are rent, mortgages, home insurance, real estate taxes, food consumed within the home, utilities and repairs, costs paid with public assistance. Expenses like clothing, education, medical, insurances, transportation, temporary assistance aren’t included in household costs.
You are eligible to claim EITC even if you don’t have children. To claim without a qualifying child, you must meet the basic qualifying rules, have a home within the US, not be claimed as a qualifying child on someone else’s tax returns, and are between 25 to 65 years of age.
You are forgiven for thinking that most US taxpayers are eligible for EITC but remember that having low or medium-income is a key here. However, if you have income derived from investment can have you disqualified if you exceed $3,650 during the tax year.
One of the most useful methods to be certain about your eligibility for EITC is to use approved free tax software. Tax software uses the step by step question method so that you don’t get confused and make mistakes. Any error made while claiming EITC can result in your disqualification of EITC for current as well as upcoming tax years. Contact USA Tax Settlement Now!
Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.