How the Earned Income Tax Credit Can Help You

If your family brings in a low-to-moderate amount of annual income, you might be able to claim and receive the EITC. Keep in mind that the amount of credit that you are awarded can change depending on whether you have children, dependents or a disability, among various other criteria.
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What qualifications must you meet in order to qualify for the EITC?
Before applying for the EITC, it's important to understand the qualifications that should be met by those seeking to benefit from this tax credit. For starters, you need to have engaged in work and earned an income level that is below specific thresholds, those of which are regularly adjusted. It's wise to consult your tax adviser for reassurance that you are below said thresholds. Alternatively, you can visit the official IRS website for more information or greater insight.

Possession of a valid Social Security number is also a requirement. Every individual you intend to claim on your tax return must also have their own valid Social Security number. These SSNs must have been issued prior to the due date of the tax return that you plan to submit for consideration of EITC eligibility. Also, in order to be eligible, you must be able to prove that you've been either a U.S. citizen or a resident alien for the entire year.

Now, if either you or your spouse — if not both — were a nonresident alien at any point in the relevant tax year, know that you can only submit a claim for the EITC if your filing status was denoted as married filing jointly. Alternatively, either you or your spouse must be a U.S. citizen with a valid Social Security number or a resident alien who was in the United States for at least six months within the filing year in question.

A valid SSN is also a required factor in those situations. Otherwise, specific rules must be adhered to if you are separated from your spouse and not filing a joint tax return.

Choose one of the following filing statuses:

• Single.
• Married filing jointly.
• Married filing separately.
• Head of household.

The head of household filing status can only be claimed if you are both unmarried and bear more than half of the costs associated with maintaining the home in which you reside with your qualifying child. For additional information about this situation in particular, take a look at Publication 501, Standard Deduction and Filing Information, on the IRS website.

In order to file as a qualifying widow or widower, you must meet the following three conditions:

1. You could have filed a joint return with your spouse for the tax year in which they passed away, regardless of whether you actually filed jointly.
2. Your spouse's death took place less than two years prior to the tax year in which you are claiming the EITC. Additionally, you did not remarry someone else before that year ended.
3. You paid more than half of the costs of maintaining your home for the year in question.

If you contributed more than half of the total costs of maintaining your home during the tax year in question, then you meet the requirements of the EITC. In terms of costs, these include rent, mortgage interest rates, real estate taxes, home insurance, repairs, utilities, food consumed at home and certain fees covered by public assistance services.

However, these costs do not include money that you received from Temporary Assistance for Needy Families or other public assistance programs. Expenses related to clothing, education, vacation, medical treatment, insurance payments, prescription drugs, life insurance, transportation, rental values, the value of your services or the value of a household member's services are not included in these costs either.

You may qualify for the Earned Income Tax Credit if you have a child or a stepchild whom you can claim as a relative, though foster children are exempt from this. Foster children aside, the child must have lived in your home for the duration of the entire year. The only exceptions are for temporary absences, births, deaths, and kidnappings. Refer to the Qualifying Child Rules for Residency for further details.

Other circumstances that might qualify you for the Earned Income Tax Credit
Don't assume that you are ineligible for the EITC just because you cannot claim children on your tax return. If you did not live with your spouse for the past six months or you are legally separated from your spouse according to state law with the help of a documented separation agreement, you may be eligible for the EITC as well. Likewise, those who have a decree of separate maintenance in place or who did not reside in the same household as their spouse at the end of the tax year might qualify for the EITC. But there are exceptions.

All these qualifications are important to review before you apply for the EITC. And while it can be hard to understand whether you qualify, professional guidance can help you immensely. If you're not sure about your filing status or your eligibility for the Earned Income Tax Credit, consider relying on the IRS EITC Qualification Assistant or the Interactive Tax Assistant for more information.

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