Earned Interest Tax Credit – How Can You Benefit From It?

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The earned income tax credit is good news for all of you who have a low-to-moderate financial condition. The IRS allows an earned income tax credit to all those taxpayers whose incomes come under this bracket. The stats have been quite good, with an average of $2,445 being paid to all taxpayers with low-to-moderate incomes.

The best part about this tax credit is that it allows you to get a tax refund even if you don’t owe any taxes. You would need to file your tax return to become eligible for it.

Read on to learn if you fit into the eligibility criteria.

Eligibility for earned income tax credit stays dynamic

Yes! You heard it right. The eligibility for the earned income tax credit keeps on varying. This means that a taxpayer with the same income might be eligible in one tax year and not in the other. Therefore, it is advisable that you stay active enough to check if you qualify for this tax credit? Such variation takes place depending upon significant life events that occur in a taxpayer’s life.

You must file a federal income tax return

Another point to remember is that even if you don’t owe any federal income tax returns, you would be required to file your returns to avail of this tax credit. Therefore, those of you who have income less than the federal income tax threshold need to check if you qualify for this tax credit.

Eligibility Factors

You would be eligible for this earned income tax credit based on your income, the number of children, filing status, etc. Also, for a child to become eligible for this credit, s/he would be required to live with the eligible taxpayers for at least six months in that tax year.

Income limits for eligibility

The income slab which makes you eligible for the earned income tax credit or refund are as follows:

For a married couple filing jointly

If you are married, filing a joint return, and earn less than the following amount, then you would be eligible for the tax credit: –

No Children: $21,370

One Child: $46,884

Two Children: $52,493

Three or more Children: $55,952

For Household Heads and singles

If you are single or the individual head of a household and earn less than the following amounts, then you would be eligible for the tax credit: –

No children: $15,570

One child: $41,094

Two children: $46,703

Three or more children: $50,162

Number of Children

The amount of tax credit as per the number of children is as follows: –

No children: $529

One child: $3,526

Two children: $5,828

Three or more children: $6,557

Please note that if you are married and filing separately, then you would not be eligible for this tax credit.

The Bottom Line

The earned income tax credit can be availed by you even if you don’t owe any federal income tax. The tax credits aim to ease and financially support taxpayers with low to moderate incomes. You can either check your eligibility yourself on the IRS website or contact your MyTaxFiler expert to assist you with availing of this tax credit.

 

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