What is the EIC and Do I Qualify?

The Earned Income Credit (EIC) is a tax credit for working people with low or moderate income who have earned income.

The amount of the credit depends on your filing status and exactly how much you earned.

If you qualify, you could pay less federal tax or even get a tax refund, but you must file a tax return.

Some general requirements include:

• You and any qualifying child must have a valid Social Security number. (Individual Taxpayer Identification Numbers, or ITINs, do not qualify.)
• Your filing status cannot be married, filing separately.
• You cannot have investment income greater than $3,150 for 2011
• You must be a U.S. citizen or resident alien for the entire year.
• You must have earned income from employment or self-employment.

TurboTax will calculate the credit and prepare the proper forms based on the information you provide.

EIC/EITC Finder for iPhone, iPod touch, iPad and Android

See if you qualify for the Earned Income Credit. Download the free mobile app - available in both English and Spanish on the:

• App Store
• Android Market
• Amazon AppStore

See IRS Publication 596 for more information on qualifying for the EIC.

• Can I get the EIC even if I am not required to file a tax return?
• I heard that the EIC is a “refundable” tax credit. What is a refundable tax credit?
• Do I have to have a child or other dependent to get the EIC?
• I received advance payments of the EIC through my paycheck at work. Do I have to file a tax return?
• Are there age limits to qualify for the EIC?
• Are there age requirements for qualifying children for the EIC?
• How many children can be used for the EIC?
• What type of dependent qualifies for the EIC?
• Can a 97 year old grandparent claim the EIC?
• Can you receive the EIC if you were on unemployment?
• Do I qualify for the EIC if I did not work?
• I have heard that the IRS is cracking down on EIC fraud. What does this mean?

Yes. Many people are eligible to receive the EIC and a refund even though they aren’t required to file a tax return. However, you must actually file a tax return to get the credit and any refund.

A refundable tax credit can generate a refund even if you have not paid or owe any federal tax. It can also fully reduce the tax you owe to zero and generate a refund if the credit is large enough.

No. The amount of the credit and the ability to qualify for it is influenced by having Qualified Children, but many people still qualify for the credit even if they don’t have children.

Yes. If you received Advanced EIC payments during the year you must file a tax return even if you normally wouldn’t have to.

Yes. You, OR your spouse if filing Married Filing Joint, must be at least age 25 but under age 65 to qualify for the EIC without a qualifying child. Age for the EIC is your age on the last day of the year. There is not an age limit with a Qualifying Child.

Yes. Qualifying Children must be under age 19 at the end of the year or under age 24 at the end of the year if a student. However, there is no age limitation on a qualifying disabled child.

There are no limits to the number of qualifying children for the EIC. However, the EIC stops increasing once you have three qualifying children.

The IRS uses “Qualifying Child” to determine the amount of the credit. To be your qualifying child for the EIC, a relative must have a valid Social Security Number and pass all the age, relationship, residency and joint return tests. Your relative must be your son, daughter, adopted child, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendent of any of them.

Yes. A 97-year old grandparent can claim the EIC if they have a Qualifying Child and met the rest of the requirements.

Receiving unemployment income does not disqualify you from receiving the EIC. However, unemployment income does not qualify as earned income. You also need to have some earned income for the year as well as meet the rest of the EIC requirements.

Maybe. Even if you did not work, you might have earned income that meets the requirements of the EIC. For example, certain disability benefits are considered earned income for the EIC.

Yes, the IRS is diligent in making sure that only qualified taxpayers receive the EIC. The IRS may ask you to provide documents to prove you are entitled to claim the EIC. Some examples of information they might ask for includes:

• birth certificates
• school records
• medical records

If the IRS decides to verify this information it will delay your refund.