Earned Income Tax Credit

There is one special item that is in the federal tax code for individuals, when one has several kids, and/or has substantially low income; it is called the Earned Income Tax Credit.  This credit is a refundable tax credit, which means that even if a person has no income tax liability, he/she will still receive extra money from the federal government, due to this tax credit.

So, what are the qualifications to get this special refundable tax credit?    First of all, one has to have, as the title of the tax credit implies, to have earned income, which are wages salaries, and/or net self-employment income, any other income source (e.g. interest, dividends, pension income, investment income, Social Security benefits), is not earned income for the purposes of qualifying for this refundable tax credit.  Secondly, the filing status of Married Filing Separately Married filing would not qualify any one for the Earned Income Tax Credit.  Third, a person has to reside in the US for at least half of the year.  Fourth, a person needs a Social Security Number, any other number (e.g.an Individual Tax Identification Number – ITIN) would disqualify a person for the Earned Income Tax Credit.  Finally, if one has children, they could qualify for this credit by:

  • Being related to the taxpayer (e.g. son, daughter, grandchild, brother, sister, niece, nephew, etc.);
  • The child must have a Social Security Number;
  • The child is under 19, or under 24 and a full-time student;  and
  • Lived with the taxpayer in the US for more than half of the year.

Of course one does not have to have qualifying child, in order to qualify for the Earned Income Tax Credit, but having qualifying children would increase the dollar amount for the Earned Income Tax Credit.  However, if a person does not have any qualifying children, could still get this refundable tax credit (providing that he/she meet the above requirements), so long he/she is between the ages 25 – 65, and is not a dependent of another person.

So, if you think you should get this refundable Earned Income Tax Credit, because you have very low income and/or has several children that you think could qualify, we would be more than happy to assist you by contacting us at info@kayatax.com, so we can mark sure you get this major refundable tax credit.