Tag Archives: Qualification

Earned Income Credit Table Amounts and Qualification for 2015, 2016 #e #filing #homepage

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Earned Income Credit Table Amounts and Qualification

The Earned Income Tax Credit (EITC) is a credit that is for low to moderate-income taxpayers to get ahead and have more money in their pockets. It can boost refunds significantly if you are able to meet the criteria’s required to claim it.

For example, if you are employed, but your income is considered “low” by the IRS you may be able to take advantage of this credit, which currently has a maximum credit amount of $6,242.

To determine your credit amount all you have to do is enter your information into tax software and it will automatically calculate the amount you will receive.

Below you will find some of the most common questions that taxpayers have about the Earned Income Credit.

Do I qualify even if I did not have tax withheld from my pay and I am not required to file taxes?

Yes, you can qualify for the EITC and get a refund. This is a refundable credit, however, in order to receive it you have to file even if you are not required to file.

Does my income have to be very low to qualify?

If you do not have qualifying children, you must have a low income to be able to claim this tax credit. For 2015, you have to have earned less than $14,820 to qualify ($20,330 for couples) if you have no children. However, if you only have one qualifying child the income limit is $39,131.

How much are the credit table amounts?

Who qualifies for the EITC?

In order to qualify for the EITC you have to meet the income criteria’s for the current year. However, you, your spouse, and children can qualify as long as you all have social security numbers and you should be working for yourself or as an employee. You aren’t able to claim this credit if you use the status “married filing jointly” and you must be a U.S. citizen or married to one.

If you can be claimed by another person as a qualifying child or are not between the ages of 25 and 65 you will not be able to claim. You also cannot have to file Form 2555 or any variation and you are not allowed to have more than $3,400 in interest, dividends, or other investment income.

Will military combat pay affect my credit?

If you have received military combat pay, you do not have to disclose this information. Usually, this income does not affect your taxable income. However, it depends on your total earned income and family size whether or not you will receive this credit and the amount. Sometimes it could be beneficial to include combat pay as taxable income so you could receive the EITC. Lastly, if you decide to include your combat pay, remember that it is “all or nothing”.

Can the credit be added to my paycheck during the year?

The IRS used to allow the Advance Earned Income Credit throughout the year. However, this ended in 2010.

Can I claim this credit if my child’s other parent claims him as a dependent?

Usually, if your child lived with you for majority of the year, you would be able to claim this credit without having to claim the dependency exemption.

It is important to remember that the number of children that are claimed, as dependents are not always the same number that qualify you for this valuable credit. In the event that the time evens out amongst parents, the parent with the highest AGI takes the credit. Only one person can claim the child and noncustodial parents are not allowed to claim children for the EITC.

Determining if your child qualifies for the EITC

  • Age or disability – The child has to be under 19 or younger than 24 if they are a full time student for at least 5 months. The child must be younger than you. If they are permanently and totally disabled, they can be any age.
  • Relationship – The child has to be your son, daughter, stepchild, sibling, stepsibling, foster or adopted child, or a descendent of any of these.
  • The child must have resided with you in the US for more than six months.
  • Your child cannot be required to file a joint return.

Can I go back and claim the EITC if I qualified but didn’t do it in past years?

You can file an amended return to receive the EITC for past years that you qualified but didn’t claim.

If you did not get the credit because you didn’t file or you were not sure if you could claim a child that lived with you, you have to file a separate return for all of the years you qualified. However, you cannot go back indefinitely. Usually, you are only able to file amended returns for three years back.

Claim your credit the easy way by filing online

Keep in mind, if you file online with H R Block or TurboTax they will ask you the correct questions to let you know which deductions you qualify for and guarantee you will receive the largest refund ever.

Their online filing services have the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail. You can also use their free tax refund estimator to see how much of a refund you can expect.


2016 vs 2015 Earned Income Tax Credit (EIC) Qualification Limits #form #16 #income #tax

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2016 vs 2015 Earned Income Tax Credit (EIC) Qualification Limits

The 2015 Earned Income Tax credit (EITC) figures reflect some minor increases over the 2014 EITC amounts and qualifying limits as a result of mandated inflation adjustments. This is in line with other 2015 tax changes .
How to read the tables above. The maximum amount of the earned income credit allowed for 2015 is shown in line 1. To claim this credit you must have at least $1 of earned income, with line 2 showing the amount of earned i ncome required to get maximum credit. The “Phaseout Threshold Amount Begins“ (lines 3 and 5 depending on filing status) and “ Phaseout Amount When Credit Ends ” (lines 4 and 6 depending on filing status) are the adjusted gross income (AGI ) ranges from where the EITC begins to phase out to where it reaches $0, or the income at or above which no credit is allowed. These income ranges change depending on the filing status and number of children.

Earned income includes all the taxable income such as Wages, salaries, and tips, certain disability benefits and self-employment earnings.

Exampleon figuring the EITC: Your AGI is $46,000, you are single, and you have two qualifying children. You cannot claim the EITC because your AGI is not less than the completed (maximum) phase out limit of $44,454. However, if your filing status was married filing jointly, you would be able to claim some of the EITC because your AGI is less than $49,974 complete phase out limit. However, you cannot get the full EITC because your income is above the $23,630 threshold phase amount. Further scenarios are shown below:

Scenario 1: Andrea has an earned income of $1,200 for the year Andrea would be entitled to a partial credit since she her earned income is less than the “ Earned Income (lower limit) required to get maximum credit ” per line 2. The amount of credit would vary based on the number of qualifying children. You can reference IRS publication 596 or use online tax providers like TurboTax or H R Block to get a free estimate of the specific credit amount you would get

Scenario 2: Rachelle has 1 child and an earned income of 15,000 for the year Rachelle is entitled to the full EIC credit for a single filer with 2 children since her earned income is above the “Earned Income (lower limit) required to get the maximum credit” on line 2 but below the “ Phaseout Threshold Amount Begins ” on line 3.

Scenario 3: Joe and Mary have an earned income of $45,000 and 2 children – Joe and Mary would be entitled to a partial EIC credit for a married couple with 2 children since their earned income is above the “ Threshold Phaseout Amount Begins ” on line 5 but below the “ Phaseout Amount When Credit Ends ” on line 6. If your situation is similar reference IRS publication 596 or use online tax providers like TurboTax or H R Block to get a free estimate of the specific credit amount you would be entitled to.

Scenario 4: Craig and Lina have earned income of $120,000 for the year – They would not be entitled to the credit at all since their earned income is above the “ Phaseout Amount When Credit Ends ” on line 6

Also in 2015, the earned income tax credit cannot be claimed if the aggregate amount of certain investment income exceeds $3,400.

Further, you have to file a tax return with the IRS to claim the EITC, even if you owe no tax or are not required to file. You can get help with figuring the EIC by following instructions in IRS publication 596 or use online tax filing software which can also help you work through figuring your credit eligibility and determine the amount you would receive.

You may also qualify for the Child tax credit in addition to the EIC. See 7 Requirements for the Child Tax Credit

If this information is useful to you consider subscribing (free) via RSS or Email

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Unearned Income Tax Credit Qualification #www.income #tax.com

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Unearned Income Tax Credit Qualification

The Internal Revenue Service and Congress want to motivate lower-income taxpayers to earn a greater amount of income. There’s not unearned income tax credit. However, there’s an earned income tax credit that’s meant to provide just such an incentive. This tax credit is applicable only to individuals that earn income under a certain amount each year and is essentially the government paying the taxpayer, rather than them paying taxes to the government.

Earned Income Credit

The earned income credit is a provision of the government that’s similar to a reverse income tax, as the money is paid to the taxpayer. To qualify, you must earn income during the tax year, and it can’t exceed the limits set forth by the IRS for the applicable year. The earned income credit doesn’t necessarily mean that you’ll receive a refund for the tax year in which you claim the credit. A credit simply reduces your tax liability, or what you owe the IRS. However, it’s a refundable credit, so if the amount you qualify for exceeds your tax liability, you receive a refund.

Limits and Qualifications

To qualify for the earned income credit, aside from having earned income from a job, you must be a U.S. citizen, not have investment income greater than $3,100, not have foreign earned income, have a valid Social Security number and not file with the status “Married, Filing Separately.” You must also have an adjusted gross income — found on Line 37 of Form 1040 — that doesn’t exceed a certain amount for each filing status. The limits as of 2010 were $13,460 for single or head of household and $18,470 for married filing jointly and no qualifying children; $35,535 for single or head of household and $40,545 for married filing jointly and one qualifying child; $40,363 for single or head of household and $45,373 for married filing jointly and two qualifying children; and $43,352 for single or head of household and $48,362 for married filing jointly and three or more qualifying children.

Qualifying Child

The limits differ for taxpayers with one or more qualifying children. A qualifying child is one who meets the relationship, age and residency tests as set forth by the IRS. To meet the relationship test, the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister or descendant of one of these. The child must be under the age of 19 as of December 31 of the current tax year, or under the age of 24 and a full-time student, or permanently and totally disabled. To meet the residency test, the child must have lived with you for more than six months of the tax year.

Figuring the Earned Income Credit

Generally, the IRS computes the earned income credit for you, as there’s a phaseout that begins at the income limits stated previously. However, you can compute the earned income credit for yourself. First begin with the amount that appears on Line 7 of Form 1040 or Form 1040A, or Line 1 of Form 1040EZ. Reduce that amount by any money you received for a scholarship or grant not reported to you on Form W-2; income received while you or your spouse was an inmate; a pension or annuity from a nonqualified or governmental deferred compensation plan; money for services as a member of the clergy or church employee; and any amount received for noncombat pay.

Disallowances

You don’t qualify for the earned income credit under certain circumstances, such as if you’re under the age of 25 or the dependent or qualifying child of another taxpayer. Another reason for which the IRS disallows you to claim the earned income credit is if you’re over the age of 65. If you claim your child as a qualifying child, then no one else can claim him.


FreeFile Program Qualification #efiling #income #tax #return

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Do You Qualify to FreeFile Your Taxes?

5 Reasons to E-File with the IRS this Year

  1. E-filing is a fast and easy way to file your taxes. In fact, it is the fastest way you can file your tax return. If you are used to paper forms and filing them manually, you will love how quickly you can e-file.
  2. Filing your tax return electronically allows you to file income taxes around your own schedule in the comfort of your own home. You will never have to visit the post office to pick up forms again.
  3. When you use an e-file provider they electronically file your taxes to the IRS.gov. Normally with a paper file an IRS worker must enter the information on the 1040 form into the computers manually which increases the chance that a return will contain errors. For this reason, the IRS reports that electronically filed returns contain less than 1% of errors, unlike the standard 20% for paper forms.
  4. Tax refunds and returns are processed much more quickly when you e-file. For example, if an e-filer selects to be paid by direct deposit they can receive their tax rebate check in as little as 8 days. much quicker than the weeks it takes to receive a traditional refund.
  5. When you e-file you will never have to worry about the IRS government receiving your taxes. When you e-file you are notified within 24 hours that you tax return has been received.

These are some of the more popular benefits to e-filing, but there are certainly many more.


Unearned Income Tax Credit Qualification #income #tax #helpline #number

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#unearned income tax credit

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Unearned Income Tax Credit Qualification

The Internal Revenue Service and Congress want to motivate lower-income taxpayers to earn a greater amount of income. There’s not unearned income tax credit. However, there’s an earned income tax credit that’s meant to provide just such an incentive. This tax credit is applicable only to individuals that earn income under a certain amount each year and is essentially the government paying the taxpayer, rather than them paying taxes to the government.

Earned Income Credit

The earned income credit is a provision of the government that’s similar to a reverse income tax, as the money is paid to the taxpayer. To qualify, you must earn income during the tax year, and it can’t exceed the limits set forth by the IRS for the applicable year. The earned income credit doesn’t necessarily mean that you’ll receive a refund for the tax year in which you claim the credit. A credit simply reduces your tax liability, or what you owe the IRS. However, it’s a refundable credit, so if the amount you qualify for exceeds your tax liability, you receive a refund.

Limits and Qualifications

To qualify for the earned income credit, aside from having earned income from a job, you must be a U.S. citizen, not have investment income greater than $3,100, not have foreign earned income, have a valid Social Security number and not file with the status “Married, Filing Separately.” You must also have an adjusted gross income — found on Line 37 of Form 1040 — that doesn’t exceed a certain amount for each filing status. The limits as of 2010 were $13,460 for single or head of household and $18,470 for married filing jointly and no qualifying children; $35,535 for single or head of household and $40,545 for married filing jointly and one qualifying child; $40,363 for single or head of household and $45,373 for married filing jointly and two qualifying children; and $43,352 for single or head of household and $48,362 for married filing jointly and three or more qualifying children.

Qualifying Child

The limits differ for taxpayers with one or more qualifying children. A qualifying child is one who meets the relationship, age and residency tests as set forth by the IRS. To meet the relationship test, the child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half brother, half sister or descendant of one of these. The child must be under the age of 19 as of December 31 of the current tax year, or under the age of 24 and a full-time student, or permanently and totally disabled. To meet the residency test, the child must have lived with you for more than six months of the tax year.

Figuring the Earned Income Credit

Generally, the IRS computes the earned income credit for you, as there’s a phaseout that begins at the income limits stated previously. However, you can compute the earned income credit for yourself. First begin with the amount that appears on Line 7 of Form 1040 or Form 1040A, or Line 1 of Form 1040EZ. Reduce that amount by any money you received for a scholarship or grant not reported to you on Form W-2; income received while you or your spouse was an inmate; a pension or annuity from a nonqualified or governmental deferred compensation plan; money for services as a member of the clergy or church employee; and any amount received for noncombat pay.

Disallowances

You don’t qualify for the earned income credit under certain circumstances, such as if you’re under the age of 25 or the dependent or qualifying child of another taxpayer. Another reason for which the IRS disallows you to claim the earned income credit is if you’re over the age of 65. If you claim your child as a qualifying child, then no one else can claim him.


FreeFile Program Qualification #based #on #income #housing

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#irs freefile

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Do You Qualify to FreeFile Your Taxes?

5 Reasons to E-File with the IRS this Year

  1. E-filing is a fast and easy way to file your taxes. In fact, it is the fastest way you can file your tax return. If you are used to paper forms and filing them manually, you will love how quickly you can e-file.
  2. Filing your tax return electronically allows you to file income taxes around your own schedule in the comfort of your own home. You will never have to visit the post office to pick up forms again.
  3. When you use an e-file provider they electronically file your taxes to the IRS.gov. Normally with a paper file an IRS worker must enter the information on the 1040 form into the computers manually which increases the chance that a return will contain errors. For this reason, the IRS reports that electronically filed returns contain less than 1% of errors, unlike the standard 20% for paper forms.
  4. Tax refunds and returns are processed much more quickly when you e-file. For example, if an e-filer selects to be paid by direct deposit they can receive their tax rebate check in as little as 8 days. much quicker than the weeks it takes to receive a traditional refund.
  5. When you e-file you will never have to worry about the IRS government receiving your taxes. When you e-file you are notified within 24 hours that you tax return has been received.

These are some of the more popular benefits to e-filing, but there are certainly many more.


FreeFile Program Qualification #earn #an #extra #income

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#irs freefile

#

Do You Qualify to FreeFile Your Taxes?

5 Reasons to E-File with the IRS this Year

  1. E-filing is a fast and easy way to file your taxes. In fact, it is the fastest way you can file your tax return. If you are used to paper forms and filing them manually, you will love how quickly you can e-file.
  2. Filing your tax return electronically allows you to file income taxes around your own schedule in the comfort of your own home. You will never have to visit the post office to pick up forms again.
  3. When you use an e-file provider they electronically file your taxes to the IRS.gov. Normally with a paper file an IRS worker must enter the information on the 1040 form into the computers manually which increases the chance that a return will contain errors. For this reason, the IRS reports that electronically filed returns contain less than 1% of errors, unlike the standard 20% for paper forms.
  4. Tax refunds and returns are processed much more quickly when you e-file. For example, if an e-filer selects to be paid by direct deposit they can receive their tax rebate check in as little as 8 days. much quicker than the weeks it takes to receive a traditional refund.
  5. When you e-file you will never have to worry about the IRS government receiving your taxes. When you e-file you are notified within 24 hours that you tax return has been received.

These are some of the more popular benefits to e-filing, but there are certainly many more.


FreeFile Program Qualification #efiling #income #tax #return #india

by ,

#irs freefile

#

Do You Qualify to FreeFile Your Taxes?

5 Reasons to E-File with the IRS this Year

  1. E-filing is a fast and easy way to file your taxes. In fact, it is the fastest way you can file your tax return. If you are used to paper forms and filing them manually, you will love how quickly you can e-file.
  2. Filing your tax return electronically allows you to file income taxes around your own schedule in the comfort of your own home. You will never have to visit the post office to pick up forms again.
  3. When you use an e-file provider they electronically file your taxes to the IRS.gov. Normally with a paper file an IRS worker must enter the information on the 1040 form into the computers manually which increases the chance that a return will contain errors. For this reason, the IRS reports that electronically filed returns contain less than 1% of errors, unlike the standard 20% for paper forms.
  4. Tax refunds and returns are processed much more quickly when you e-file. For example, if an e-filer selects to be paid by direct deposit they can receive their tax rebate check in as little as 8 days. much quicker than the weeks it takes to receive a traditional refund.
  5. When you e-file you will never have to worry about the IRS government receiving your taxes. When you e-file you are notified within 24 hours that you tax return has been received.

These are some of the more popular benefits to e-filing, but there are certainly many more.


2016 vs 2015 Earned Income Tax Credit (EIC) Qualification Limits #tax #returns #filing

by ,

#income tax credit

#

2016 vs 2015 Earned Income Tax Credit (EIC) Qualification Limits

The 2015 Earned Income Tax credit (EITC) figures reflect some minor increases over the 2014 EITC amounts and qualifying limits as a result of mandated inflation adjustments. This is in line with other 2015 tax changes .
How to read the tables above. The maximum amount of the earned income credit allowed for 2015 is shown in line 1. To claim this credit you must have at least $1 of earned income, with line 2 showing the amount of earned i ncome required to get maximum credit. The “Phaseout Threshold Amount Begins“ (lines 3 and 5 depending on filing status) and “ Phaseout Amount When Credit Ends ” (lines 4 and 6 depending on filing status) are the adjusted gross income (AGI ) ranges from where the EITC begins to phase out to where it reaches $0, or the income at or above which no credit is allowed. These income ranges change depending on the filing status and number of children.

Earned income includes all the taxable income such as Wages, salaries, and tips, certain disability benefits and self-employment earnings.

Exampleon figuring the EITC: Your AGI is $46,000, you are single, and you have two qualifying children. You cannot claim the EITC because your AGI is not less than the completed (maximum) phase out limit of $44,454. However, if your filing status was married filing jointly, you would be able to claim some of the EITC because your AGI is less than $49,974 complete phase out limit. However, you cannot get the full EITC because your income is above the $23,630 threshold phase amount. Further scenarios are shown below:

Scenario 1: Andrea has an earned income of $1,200 for the year Andrea would be entitled to a partial credit since she her earned income is less than the “ Earned Income (lower limit) required to get maximum credit ” per line 2. The amount of credit would vary based on the number of qualifying children. You can reference IRS publication 596 or use online tax providers like TurboTax or H R Block to get a free estimate of the specific credit amount you would get

Scenario 2: Rachelle has 1 child and an earned income of 15,000 for the year Rachelle is entitled to the full EIC credit for a single filer with 2 children since her earned income is above the “Earned Income (lower limit) required to get the maximum credit” on line 2 but below the “ Phaseout Threshold Amount Begins ” on line 3.

Scenario 3: Joe and Mary have an earned income of $45,000 and 2 children – Joe and Mary would be entitled to a partial EIC credit for a married couple with 2 children since their earned income is above the “ Threshold Phaseout Amount Begins ” on line 5 but below the “ Phaseout Amount When Credit Ends ” on line 6. If your situation is similar reference IRS publication 596 or use online tax providers like TurboTax or H R Block to get a free estimate of the specific credit amount you would be entitled to.

Scenario 4: Craig and Lina have earned income of $120,000 for the year – They would not be entitled to the credit at all since their earned income is above the “ Phaseout Amount When Credit Ends ” on line 6

Also in 2015, the earned income tax credit cannot be claimed if the aggregate amount of certain investment income exceeds $3,400.

Further, you have to file a tax return with the IRS to claim the EITC, even if you owe no tax or are not required to file. You can get help with figuring the EIC by following instructions in IRS publication 596 or use online tax filing software which can also help you work through figuring your credit eligibility and determine the amount you would receive.

You may also qualify for the Child tax credit in addition to the EIC. See 7 Requirements for the Child Tax Credit

If this information is useful to you consider subscribing (free) via RSS or Email

Share this:


Earned Income Credit Table Amounts and Qualification for 2015, 2016 #free #e #file

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#irs earned income credit table

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Earned Income Credit Table Amounts and Qualification

The Earned Income Tax Credit (EITC) is a credit that is for low to moderate-income taxpayers to get ahead and have more money in their pockets. It can boost refunds significantly if you are able to meet the criteria’s required to claim it.

For example, if you are employed, but your income is considered “low” by the IRS you may be able to take advantage of this credit, which currently has a maximum credit amount of $6,242.

To determine your credit amount all you have to do is enter your information into tax software and it will automatically calculate the amount you will receive.

Below you will find some of the most common questions that taxpayers have about the Earned Income Credit.

Do I qualify even if I did not have tax withheld from my pay and I am not required to file taxes?

Yes, you can qualify for the EITC and get a refund. This is a refundable credit, however, in order to receive it you have to file even if you are not required to file.

Does my income have to be very low to qualify?

If you do not have qualifying children, you must have a low income to be able to claim this tax credit. For 2015, you have to have earned less than $14,820 to qualify ($20,330 for couples) if you have no children. However, if you only have one qualifying child the income limit is $39,131.

How much are the credit table amounts?

Who qualifies for the EITC?

In order to qualify for the EITC you have to meet the income criteria’s for the current year. However, you, your spouse, and children can qualify as long as you all have social security numbers and you should be working for yourself or as an employee. You aren’t able to claim this credit if you use the status “married filing jointly” and you must be a U.S. citizen or married to one.

If you can be claimed by another person as a qualifying child or are not between the ages of 25 and 65 you will not be able to claim. You also cannot have to file Form 2555 or any variation and you are not allowed to have more than $3,400 in interest, dividends, or other investment income.

Will military combat pay affect my credit?

If you have received military combat pay, you do not have to disclose this information. Usually, this income does not affect your taxable income. However, it depends on your total earned income and family size whether or not you will receive this credit and the amount. Sometimes it could be beneficial to include combat pay as taxable income so you could receive the EITC. Lastly, if you decide to include your combat pay, remember that it is “all or nothing”.

Can the credit be added to my paycheck during the year?

The IRS used to allow the Advance Earned Income Credit throughout the year. However, this ended in 2010.

Can I claim this credit if my child’s other parent claims him as a dependent?

Usually, if your child lived with you for majority of the year, you would be able to claim this credit without having to claim the dependency exemption.

It is important to remember that the number of children that are claimed, as dependents are not always the same number that qualify you for this valuable credit. In the event that the time evens out amongst parents, the parent with the highest AGI takes the credit. Only one person can claim the child and noncustodial parents are not allowed to claim children for the EITC.

Determining if your child qualifies for the EITC

  • Age or disability – The child has to be under 19 or younger than 24 if they are a full time student for at least 5 months. The child must be younger than you. If they are permanently and totally disabled, they can be any age.
  • Relationship – The child has to be your son, daughter, stepchild, sibling, stepsibling, foster or adopted child, or a descendent of any of these.
  • The child must have resided with you in the US for more than six months.
  • Your child cannot be required to file a joint return.

Can I go back and claim the EITC if I qualified but didn’t do it in past years?

You can file an amended return to receive the EITC for past years that you qualified but didn’t claim.

If you did not get the credit because you didn’t file or you were not sure if you could claim a child that lived with you, you have to file a separate return for all of the years you qualified. However, you cannot go back indefinitely. Usually, you are only able to file amended returns for three years back.

Claim your credit the easy way by filing online

Keep in mind, if you file online with H R Block or TurboTax they will ask you the correct questions to let you know which deductions you qualify for and guarantee you will receive the largest refund ever.

Their online filing services have the ability to import your W2 information into your tax return so you can avoid worrying about your forms being delivered via snail mail. You can also use their free tax refund estimator to see how much of a refund you can expect.