Earned income credit is a federal program to assist low income working adults. Parents with children who qualify for the program receive a tax credit with each paycheck. People without children who qualify (and are over 25) can receive a tax credit with their annual 1040 tax return.
Who qualifies
To qualify, all participants must:
- Have earned income (be working and receive a W-2). Nontaxable military pay, workfare payments, earnings while an inmate, or disability insurance do not count as earned income.
- Have a valid social security number
- Cannot file married, filing separately
- Cannot be a qualifying child of another person
- Must be a U.S. citizen or resident alien all year
- Cannot have investment income greater than $2,800 or foreign earned income
- Have income that is less than:
| Single | Joint | |
|---|---|---|
| 1 qualifying child | 39,131 | 44,651 |
| 2 qualifying children | 44,454 | 49,974 |
| More than 2 children | 47,747 | 53,267 |
| No children | 14,820 | 20,330 |
What to do
If an employee qualifies for earned income credit and has a child, the employer should contact the IRS at 800 829-1040. for information on how to provide the employee a tax credit with their paychecks.
If an employee qualifies, but has no child, the employee should contact the IRS at 800 829-1040. for information on claiming the tax credit at year-end.
Questions? Call the IRS information hotline (800) 829-4933 or visit http://www.irs.gov/publications/p596/ch01.html. For forms, call (800) 829-3676 or obtain them online at http://apps.irs.gov/app/picklist/list/formsPublications.html.
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