With so many taxes, it's nice to know there is some relief out there. One such relief is the earned income credit, but there is some confusion as to what it is and how to use it, so here's a basic rundown.
What exactly is the earned income credit?
The earned income tax credit is the cause of almost all five-figure income tax returns. It's purpose is simple. It's there to lower the tax burden of low to moderate wage earners. You might be surprised to know that you don't have to have a family to claim it.
Who qualifies and for how much?
This is where it gets slightly complicated, as the amount is based on a few factors such as the number of dependents you have, your income and whether your married. The table is enormous and too complicated to reproduce here, but it is posted at the IRS website here. https://taxmap.irs.gov/taxmap/instr/i1040gi-015.htm
How do I claim it?
The qualifications are fairly standard. You must be a U.S. citizen or resident alien, and have earned income for the tax year. You and everyone you are claiming must also have a social security number or ITIN. In case it needs to be said, You must also file a tax return.
The earned income credit can give huge boost to your tax return, and luckily, a tax return preparer can use their software to do all the background calculations for you and tell you if you qualify, so if you're unsure if you qualify, just visit a professional.
