Recent changes to the Earned Income Tax Credit (EITC) may put more money in your pocket in 2014 if you are married, or if you have three or more qualifying children.
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Here are the latest changes that might benefit you:
- More married couples now qualify for the maximum credit in 2014 because the income levels at which the credit begins to phase out have been increased: $20,020 for married couples with no kids, and $43,941 for married couples with one qualifying child, $49,186 for married with two qualifying children, and $52,427 for married with three or more qualifying children. Since the squeeze on the size of the credit starts at higher income levels, married recipients will enjoy a slightly increased credit. And because income thresholds are indexed for inflation each year, it’s possible that still more married couples will qualify for the full credit in 2015.
- Families with three or more qualifying children can qualify for a bigger tax credit. For 2014, those families can get a maximum credit of $6,143. As indexing continues to increase the threshold, families could receive an even larger maximum credit next year.
Get help in advance
When you file your 2014 tax return, TurboTax will decide for you whether you qualify for one of these increases. Keep in mind that the new law doesn’t change the basic rules that limit who can qualify for the Earned Income Credit. For example, you must be a U.S. citizen (and any qualifying children must also be U.S. citizens), have earned income, and for 2014 not receive more than $3,350 in interest or dividends from rentals, royalties or stock and other assets during the year.