The Earned Income Tax Credit, also known as EITC or EIC, is a benefit designed to support low- to moderate-income working people. It helps reduce the amount owed on taxes and can even result in a refund. By design, it is meant to benefit working families more than workers without children who qualify for the EITC credit.
How Does the Earned Income Tax Credit Work?
To obtain the EITC, you must meet the earned income tax credits eligibility requirements, such as each qualifying member of the family having a valid Social Security number, and must file a tax return.
The EITC is intended to help subsidize working families while encouraging them to work at the same time. The credit is equal to a percentage of a worker’s earnings, up to a maximum amount. Both the percentage and maximum credit varies by the family size. In some cases, the EIC may provide a refund that is more than the income tax that was withheld from paychecks.
Who Qualifies for the Earned Income Tax Credit?
While the EITC credit is not known for simplicity, there are several straightforward eligibility
requirements, such as:
- Must file as an individual or married filing jointly
- Each qualifying member of the family must have valid SSNs
- Filer must be older than 25 and younger than 65
- Income must fall within the appropriated limits (depends on the size of your family)
- Must have earned income, e.g. wages from working for someone or running a business.
Need Help Claiming EITC?
Knowing if you qualify for EITC credit, much less claiming it, can be incredibly difficult. At Tax Help MD, we’re here to help.
We excel at helping people like you get on top of taxes and get the most out of them. From walking you through tax benefits available for disabled children to filing the best, most honest tax return, we’re eager to take the burden of taxes off your shoulders.
Contact us today to schedule an appointment!