EITC Awareness Day: Common Questions About Earned Income Tax Credit Answered

Tax Deductions and Credits

IRS kicks off tax season just in time for EITC Awareness Day today.  The earned income tax credit has helped millions of hard-working Americans get out of poverty and can be a credit worth up to $6,044 depending on your income.  Phil Taylor answers common questions to help you understand more about the Earned Income Tax Credit.

According to the IRS, 1 in 5 federal tax filers overlook this important tax credit. It’s the Earned Income Tax Credit or EITC.

EITC is a refundable tax credit given to filers that earn low to moderate income from their job, a business, or from farming. Since the credit is refundable it can result in big tax refunds for those who qualify.

Here are some common questions about the EITC:

Who is eligible to claim the credit?

Generally speaking, you qualify for this credit if you are a U.S. citizen, over the age of 25 or have qualifying children, do not file “married filing separately”, and have earned income from employment within the limits.

It’s not that hard to qualify for this credit. But remember, you have to file your federal taxes to receive it.

TurboTax will ask you simple questions related to you so you can take this valuable tax credit when you file.

What are the income limits?

The limits are adjusted each year, but for tax year 2013 your earned income and adjusted gross income limits are:

  • For those with three or more qualifying children, $46,227 ($51,567 married filing jointly)
  • For those with two qualifying children, $43,038 ($48,378 married filing jointly)
  • For those with one qualifying child, $37,870 ($43,210 married filing jointly)
  • And for those with no qualifying children, $14,340 ($19,680 married filing jointly)

What is the amount of the credit?

Your income and number of qualifying children will determine the actual amount of your credit.

The maximum credit you can qualify for is $6,044 with three or more qualifying children, $5,372 with two qualifying children, $3,250 with one qualifying child, and $487 if you don’t have any qualifying children.

The credit is phased out the closer your income gets to the limits above.

For example, a filer that is married filing jointly with three qualifying children and an income of $51,000 will receive EITC. But that credit would be significantly smaller than if the filers income was $40,000.

What is a qualifying child?

A child qualifies if he/she meets the four tests for: age, relationship, residency, and joint return as follows:

  1. Age – Generally, your child must be under 19, or under 25 if a student; or any age if permanently and totally disabled.
  2. Relationship – Your child must be either your son, daughter, foster child, or step child (including all of their respective children). As strange as it sounds, for purposes of the credit, your “qualifying child” can also be your brother, sister, half brother or sister, or step sibling (including all of their respective children).
  3. Residency – Your child must have lived with you in the U.S. for more than half the year.
  4. Joint Return – Your child must not have filed a joint return. If they did file a joint return it should have been because they were filing for a refund, not because they were actually required to file.

If your child meets all of these tests then he/she is a qualifying child for EITC purposes.

How to I determine my credit amount?

Don’t worry about figuring this all out on your tax return.  TurboTax will calculate your credit based on your answers if you’re eligible. You can simply answer a few questions and let the software do its thing.

What are some mistakes to watch out for?

According to the IRS, some of the more common mistakes filers make when trying to claim the EITC are: claiming a child that is not qualified; mismatching SSNs or names; incorrect income.

Now that you have more information about EITC, you’re ready to file and take advantage of this tax credit you’ve worked so hard to earn.

Comments (83) Leave your comment

  1. Does form 1099B get included in investment income, for Earned Income Tax Credit purposes? Having an issue with the IRS…1099-Div totals $2100 but the same investment’s 1099-B indicates proceeds of $19000, which IRS is counting as investment income. I input it in Turbotax, and Turbotax gave me the EITC.

  2. I was audited in 2013 and did not file earned income in 2014 but filed earned income 2015 my tax return was rejected do I fill out 8862 form I was not sent anything in mail saying that I had been disallowed from earned income but the person who did my taxes says that we can fill out form 8862 is thus true only thing irs sent was a statement in 2013 telling me about my audit

  3. If I’m filing on turbo tax, how do I do the Eitc? Is there somewhere on there where you can do that? Or is the eitc firm separate?

    1. Nomi,
      The EITC is calculated in the Deductions section of TurboTax, About Your Family. TurboTax will calculate any credit you are entitled to based on how you complete that section,
      Mary Ellen

    1. Becky,
      If the income on your 1099-Misc is in box 7, it is earned income and will contribute to income used to calculate EITC.

  4. I just had to fill out form 8862 due to something that happen in the past. I know I’m not going to get that EIC credit until the IRS review my information, but I was wondering if I will receive the other portion of my money? The part that I earned through my job. Will there be any delay on this portion?

  5. Is the amt minimum changed for eitc from 2014-2015 I worked in 2014 so will I be filing 2014 or 2015 taxes being it is 2015 now I have been reading your post very through I would appreciate your imput

    1. Will,
      You are preparing your 2014 taxes in 2015. The amounts listed in the article will apply to the tax returns being prepared at this time.

      Mary Ellen

  6. my boyfriend made 65,000 for the year, we both have a child and we all live together and have for the last 3 years.so would both children or eather one be eligable for the tax credit?

    1. Lena,
      Your boyfriend will not qualify for EITC because his income is too high. I would think he would be claiming Head of Household filing status because he is providing the majority of the expense of maintaining the home, and you will be filing as single with a dependent. Two people in one house cannot both provide more than 50% of the expense of maintaining the house.
      If you meet all the criteria and your earned income is within the limits (under $38,870), you will qualify for EITC. You can complete the EITC section in TurboTax and TurboTax will calculate the correct amount of the credit for you.

      Mary Ellen

  7. I rolled over my investments at the end of 2012 and received a short term and long term loss report. I also have some carry over loss from 2011. When I enter the numbers into the program it tells me that my investment income is over 3300 but it’s not. It’s all a loss and negative minus number plus I have some carry over from the previous year so why would it not reflect that for the EIC ?

    1. Michelle,
      If you have interest, dividends or passive income, that will be included in your investment income to calculate the $3,300. Are those items affecting your credit?

      Mary Ellen

  8. My girlfriend /mother of my son has to other kids that live with us all under 18.The job she worked at took out taxes last year in 2013 tax season,but in 2014 tax season they failed to do so even tho she filled out her w4 same as the year before.she was devastated!she only makes 20 thousand a year.would she still qualify for the credits?please help!

    1. Hi Brandon,

      When you say they did not take out taxes in 2014, do you mean that she received a 1099-Misc instead of a W-2, or that there were no federal income taxes withheld on her W-2?

      Either way, an individual earning $20,000 with three dependents will qualify for the EITC.

      Mary Ellen

    1. Yvonne,

      If you do not have a profit, you do not have earned income and will not qualify for EITC.

      Mary Ellen

  9. I have two jobs- one that I made 30,000 last year and the other just part time barely made 5,000. Do I need to wait for the second w2 to file or can I file without it?

  10. 2013 was the first year that I did my own taxes and realized that I qualify for EITC. I filed for it and received it, however. I’m wondering if it’s possible to back file for the years I missed it? My daughter was born in 2007 and I have been earning within the eligibility guidelines since 2008.
    Thank you.

    1. I’ve been reading about tax refunds and EITC for the past 2 hrs.. To answer your question, from what I’ve read, Yes you can but you may only back file for the max of the past 3 yrs.. Hope this helps.!

    2. Hi Kat,

      Yes, you can amend your 2012 and 2011 tax returns to receive the EITC you are entitled to. Earlier years are closed.
      You can purchase prior year TurboTax desktop products at https://turbotax.intuit.com/personal-taxes/past-years-products

      You will need to prepare the return as you originally filed it, then save the file. Reenter the program, say you wish to amend your return, and add the EITC information. You will need to print and mail the returns. You cannot efile amended returns.

      If you used a paid preparer for your returns prior to using TurboTax, you could contact them about amending your returns due to their overlooking this credit for you.

      Mary Ellen

  11. can anyone tell me about the form 8862 i carried 2 relatives on my taxes the irs gave me credit for one of the relatives but denied me on another relative do i have to file form 8862,the irs sent me a letter saying i have to file form 8862 but i dont know if that was a computer generated letter from the irs

    1. Hi los –
      Yes, if the IRS denied EITC for a relative on your tax return, you will need to complete form 8862 for that relative in the future. The Form 8862 gives the IRS sufficient information to know if a dependent qualifies for the EITC for you and not for another taxpayer, like another parent or relative.

      Even if a letter is computer generated from the IRS, it is not wise to ignore it. There can be far reaching implications to ignoring any correspondence from the IRS.

      Mary Ellen

    1. Chantal,
      For 2014, if your mother is under the age of 65 and has no dependents, and investment income of no more than $3,350, she can qualify for EITC with earned income of as little as $1, but no more than $14,590. If she has qualifying dependents, she can qualify with income much higher.

      Mary Ellen

  12. Before I did the EIC my return was going to be x amt. After I did it, according to what they said my credit would be, it should have gone up a lot more than it did.

    I tried to call but no one ever got back to me.

    What do I do now?

    Thanks

    1. Hi Angel, I found out by accident that I was entitled to an EIC check. I sent the paperwork and it took six weeks to get mailed to me. There is no way to check status of it online (like a refund from IRS) but I did call the IRS and they were able to tell me when the check was processed to be mailed. I qualified for $243, which was a nice little windfall. Good luck.

  13. I have been told being single divorced low income 36 year old female who temporarily has my child living with my mother for protection issues due to expired protective order and was in bad wreck and went through bug deal recovering from pain pill dependancy but good now and staying with my daughter more at my parents as often as possible till I can get back in court for antihero protection order or to have the father supervised so for now while not making much money to take care of this situation and feel safe of her staying at my house full time can I claim claim my child still or do the not claim but recieve earned income or some of it..

    1. Misty,

      I think I understand your situation –
      Your daughter lives with your mother currently. You were in rehab, but are now released and staying at your mothers until you have protection in place against your daughter’s father.

      If you have wages, and your daughter meets the definition of a qualifying child from the article above, you may qualify for the earned income tax credit.

      Mary Ellen

    1. Judy,
      In order to qualify for Earned Income Tax Credit, you must have wages or self-employment income. Social security and retirement income are not considered earned income for EITC.

  14. I am over 62 and work part-time so my total yearly income was under $3,000. I filed my tax return and got a very small refund. However, three weeks ago the IRS sent me a form telling me that I probably qualify for an Earned Income Credit of up to $487. I am single, no kids, nobody claims me as a dependent etc. I was surprised to learn that I missed this $$. How can I find out if they got the form (I mailed it) and how much money should I expect? Thank you.

    1. Hi Christine,
      It does sound like you may qualify for the Earned Income Tax Credit as a qualifying person without a child. I would call the IRS and see if they received your form.
      Thank you,
      Lisa Greene-Lewis

    1. Hi Sweetpea,

      You will need to contact the IRS to determine why your refund is delayed. You can also ask Liberty Tax when your tax return was accepted by the IRS.

      Thank you,

      Mary Ellen

  15. I filed taxes on 1/29/2014, got accepted on 1/31 n it been 23/24 days now. Today is 2/25/2014. What do I do? The irs site says “it’s still being process, a date will be given when available”. It don’t even have the receive,process, an sent meter bar any more

    1. Hi Travis,
      I am sorry you are experiencing a delay in your refund. Once a return has been accepted by the taxing authorities, it is out of our hands and only the IRS can tell you why there is a delay.

      Mary Ellen

    1. Erick,

      If your 19 year old daughter is not a full time student and not totally disabled, she will not be a qualifying child for EITC. She will probably be a qualifying relative for a dependent deduction.

      Thank you,

      Mary Ellen | TurboTax for Business

  16. Filed on 02/06/2014. Accepted same day. Got Washington DC return in my a/c on 02/18/2014.irs approved on 02/16 with ddd of 02/21/2014. Waiting to c if deposit will be in a/c with day break

  17. I was given a date when my refund was mailed out which was on a Friday 2/14/14. How many days after that will i receive it and is there certain days you will receive them in the mail?

    1. Melissa,

      There is no set number of days it takes mail to go from one place to another. You can check at USPS.com how long it takes mail to get from Philadelphia to your home. That will give you a ball park of when to expect your check if you know the date it was mailed.

      Mary Ellen | TurboTax for Business

  18. I already got part of my refund…the irs website said my refund was deposited in my account on 2/6/14 but it never showed…i guess they rejected the deposit..it got sent back to irs..now i gst a paper check mailed to me..how long does that take…

  19. If I filed my taxes with turbo tax and it didn’t go thru the first time,so I had to resubmit it how much extra would that cost?Please get back to me asap,thank you.

    1. Hi Wanette,

      There is no additional charge to resubmit a rejected tax return to efile. There is no charge to efile your federal or your state return with TurboTax.

      Mary Ellen

  20. I worked as an independent contractor last year. What form am I supposed to use? Do I still use 1040? Also, there wasn’t any taxes taken out of my checks. Can I still file EITC for my two children?

    1. Hi Erline,

      You will still file form 1040 for your taxes, but you will include Schedule C, Business Income and Expenses, and Schedule SE, Self-Employment Tax with your return. If your income is in the qualifying range, you can apply for EITC just as you always have.

      TurboTax will help you with your Schedules C and SE. You will say that you have started a business, or that you received a form 1099 Misc in order to get the proper forms.

      Thank you,

      Mary Ellen

    1. Gwen,

      Mortgage interest and property taxes you pay are deductible expenses. If your total itemized deductions exceed your standard deduction, you would deduct the larger amount.

      Mary Ellen

    1. Meagan,

      The IRS says that most refunds are paid within 21 days of filing. There are no guarantees as to when a refund will be received.

      Mary Ellen

    1. topic 152 explains the 3 different ways you can file ….like efile or by mail using paper and explains the usual amount of time it takes to get your refund depending on which method you used to file

    2. Chris,

      I don’t have access to Topic 152. What does it say?

      The IRS says that 9 out of 10 refunds are paid within 21 days of filing. It has only been 13 days. Keep checking “Where’s My Refund?” for additional information. The IRS updates the site once a day.

      Mary Ellen

    1. Sylvia,

      There is no minimum, but lower income will result in a lower credit. For instance, a single individual with no children, earning between $450 and $500, will receive a $36 credit. If that same individual earned between $2,700 and $2,750, the credit would be over $200.

      The IRS has a tool to help you determine eligibility and an estimate of your credit at http://apps.irs.gov/app/eitc2013/

      Mary Ellen

      1. hello
        I’m worried that tomorrow I only good 2300 dollars for my TurboTax,when they told me that I was going to receive a 7200

        my question is should I contact the IRS?

      2. Nelvisa,

        If your tax refund was reduced from what you were expecting, you should receive an explanation from the IRS. If you don’t hear from them soon, you can call them to determine what happened and what needs to be done to resolve the situation.

        Mary Ellen

    1. Cecelia,

      You can go to http://www.irs.gov/Refunds
      to check on the status of your refund. If you efiled your return, you can check after 24 hours. If you mailed in your return, they recommend you wait for 4 weeks before checking.

      Mary Ellen

    1. I was told if you do direct deposit you would most likely recieve it like a bi weekly check and it would be on a Friday

  21. I am filing in new hampshire with e file , I am being told the 1040 individual form is not available and I will be notified by email at some point….true?

    1. I suggest going to your NH state website and comparing your Turbo Tax NH state return with the NH state website form. Check your 2013 State Tax Brackets and Rates table for your tax rate and verify your state tax withheld. If you are a basic W-2 filer – you should be okay to e-file from the state website or to file by mail if the information is correct. Turbo Tax may have State Tax Rate issues this year because there are many state forms that indicate you cannot file your Turbo Tax form because it is not the final state form for whatever reason.

    1. Hi Lisa,

      Dependent relatives will not be qualifiers for earned income credit, only a qualifying child. If your income is low enough, you may qualify for EIC without a dependent.

      Mary Ellen

      1. Chazity,
        There is no way for us to determine the date of your refund. It will depend on how long the IRS takes to complete their review. If you have contact with the IRS agent reviewing your Schedule C, they may be able to tell you when to expect your refund.

    1. Hi Marlene,
      Please try again. I haven’t seen anyone else with this problem. I just logged in to test and was able to log in.
      Thank you,
      Lisa Greene-Lewis

  22. If you are taking care of a Parent over 65 – are you able to qualify this — as I claim my mother as my dependent due to her low SS — only source of income

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