If you didn’t earn a lot of money last year, you may very well be eligible for the Earned Income Tax Credit. Although the EITC has existed for decades, it’s been improved and expanded over the years. The maximum benefit was increased under the American Recovery and Reinvestment Act of 2009 for the 2009 and 2010 tax years, and then extended through 2012.
What factors are considered?
The benefit is based not only on your income, but also whether you are filing as an individual or head of household, or as a married couple filing jointly. It also is based on whether you have children, and if so, how many you have.
How much money can I have earned?
The income limits vary based on the number of children you have. For an individual or head of household with no children, 2010 income must be less than $13,460; for married people filing jointly who have no children, income must be less than $18,470 to qualify for the tax credit. Income limits increase based on the number of children you have, topping out at $43,352 for individuals or heads of household who have three or more children, and $48,362 for married people filing jointly who have at least three children.
My income is under those limits. Now what?
The IRS offers the online 2010 EITC Assistant, which walks you through the steps to see if you qualify. It looks at things like the age of your children, whether they lived with you during the year, and whether you have investment income. The site also can help estimate your credit amount.
How much money can I get back?
The maximum credit for someone with three or more children filing jointly is $5,666, but even single people with no children can receive up to $457. The EITC can help reduce the amount of tax you owe, or even result in a tax refund.
About the Writer
Susan Ladika has been a writer and editor for 25 years. Her freelance work has covered everything from business to travel to science to international issues, and have appeared in such publications as Science, Town & Country, HR Magazine, Developer, The Wall Street Journal-Europe, The San Francisco Chronicle, and many others. She has also done extensive editing as a newspaper and wire service editor holding positions such as the Tampa Tribune Bureau Chief.
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