114. Make $500-$5,000 per year Ė Tax credits for working people (Earned Income Tax Credit, EITC)

Everyone wants to keep more of their hard-earned money at tax time. If you earn a low to moderate income you may be able to get the Earned Income Tax Credit (EITC) and pay less in taxes.

More than one in four people who could claim the credit donít because they do not know about it or because they donít file their taxes.

See the top ten questions about the EITC:

1. What is the Earned Income Tax Credit (EITC):
The Earned Income Tax Credit or Earned Income Credit (EIC) is a credit that can help individuals and families with low to moderate incomes pay less in taxes.

2. My spouse and I earned $40,000 in 2011. Can we get the EITC?
People with low to moderate incomes may be able to receive the credit. You could qualify if you worked in 2011 and your earned income and adjusted gross income (AGI) was less than the following amount:

Number of Qualifying Children    Single            Married Filing Jointly      
3 or more                                   $43,998            $49,078      
2                                                $40,964            $46,044      
1                                                $36,052            $41,132      
0                                                $13,660            $18,740

3. How much money could I receive with the EITC credit?

The amount of the credit depends on your income and the number of qualifying children you have. For people with wages, salaries, tips, self-employment income and other earnings, the EITC gives up to:
$5,751 to households with three or more children
$5,112 to households with two or more children
$3,094 to households with one child
$464 to households with no children (only if you were between ages 25 and 64 in 2011)

4. How old do my children need to be to qualify as dependents for the EITC?
Your children must have lived with you for more than half of the year to be included as dependents for the EITC. In 2011, your children must be:
Under 19, or
Under twenty-four if they are a full-time student, or
Any age if theyíre totally disabled

5. What do I need to do to get the Earned Income Tax Credit?
You need to file a tax return (including schedule EIC) to get this credit. Even if you donít owe income tax and arenít required to file, itís best if you file. In many cases, you will get money back!

6. Can I still get Medicaid and food stamps (SNAP) if I get the EITC?
Yes. The credit wonít count as income for programs like Medicaid, food stamps (SNAP), SSI, cash assistance or public housing. You can save the refund you receive for up to a year and it wonít be considered as income/assets by federal assistance programs.

7. Does my state offer an Earned Income Tax Credit in addition to the federal EITC?
Twenty-two states, New York City, the District of Columbia and Montgomery County, Maryland offer a credit similar to the EITC. Find out if your state offers the EITC.

8. Do I need a Social Security number to get the EITC?
Yes. You, your spouse and all of your dependents must have a valid Social Security number that authorizes you to work in the U.S. in order to get the EITC.

9. Can I file for the EITC on my past tax returns?
Yes. You can apply for the credit for the past three years (2010, 2009 and 2008). That could mean a lot of extra money for your family. Get help filing your taxes for free in person.

10. Can I still apply for the Making Work Pay Credit or the Advanced Earned Income Tax Credit?
No. The Making Work Pay Credit and the Advanced Earned Income Tax Credit are not available for tax year 2011. Talk to your tax adviser.

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