What is the Earned Income Tax Credit?

The EITC is a special tax benefit for working people who earn low or moderate incomes. It has several important purposes: to reduce the tax burden on these workers, to supplement wages, and to make work more attractive than welfare.

Workers who qualify for the EITC and file a federal tax return can get back some or all of the federal income tax that was taken out of their pay during the year. They may also get extra cash back from the IRS. Even workers whose earnings are too small to have paid taxes can get the EITC. What's more, the EITC reduces any additional taxes workers may owe, such as payroll taxes.

Who can get the EITC and how much is it worth FOR 2009?

Single or married people who worked full time or part time at some point in 2009, and have a valid Social Security Number (Individual Taxpayer Identification Numbers or ITINs do not qualify) can qualify for the EITC, depending on their income:

• Workers who were raising one child in their home and had family income of less than $35,463 (or $40,463 for married workers) in 2009 can get an EITC of up to $2,917.
  
  

• Workers who were raising two or more children in their home and had family income of less than $40,295 (or $45,295 for married workers) in 2009 can get an EITC of up to $5,028.
   

• Workers who were raising three or more children in their home and had family income of less than $43,279 (or $48,279 for married workers) in 2009 can get an EITC of up to $5,657. Note: three or more children is a provision for 2009 and 2010 only
  
  

• Workers who were not raising children in their home but were between ages 25 and 64 on December 31, 2009, and had income below $13,440 (or $18,440 for married workers) can get an EITC of up to $457.

Which children qualify for the EITC?

"Qualifying children" include: sons, daughters, stepchildren, grandchildren and adopted children. Brothers, sisters, stepbrothers or stepsisters -- as well as descendants of such relatives -- if they were cared for as members of the family. Other children may qualify as foster children, but only if they are placed with the worker by an authorized government or private placement agency. "Qualifying children" must be under age 19 or under age 24 if they are full-time students. They must live with the worker for more than half of the year. Totally and permanently disabled children of any age also are considered "qualifying children." Valid Social Security numbers are required for qualifying children born before December 31, 2009.

How do you get the EITC?

Workers raising children in 2009 must file either Form 1040 or 1040A and must fill out and attach Schedule EIC. Workers with children cannot get the EITC if they file Form 104OEZ or fail to attach Schedule EIC. Married workers must file a joint return to get the EITC.

Workers who were not raising children in 2009 can file any tax form - including the 104OEZ. These workers write "EITC" (or the dollar amount of their credit) on the Earned Income Credit line on the tax form. They do not file Schedule EIC.

A correct name and Social Security number must be provided for every person listed on the tax return and Schedule EIC. If this information is incorrect or missing, the IRS will delay the refund.

Workers don't have to calculate their own EIC; if they choose, the IRS will do it for them!

Workers raising children can get the EITC in their paychecks!

Workers who are raising children can get part of their EITC in their paychecks throughout the year and part in a check from the IRS after they file their tax return. This is called the advance payment option. For more information, contact your employer and request Form W-5.

Workers can get FREE help filing their tax forms

Many families that apply for the EITC pay someone to complete their tax forms. This can cost $175 or more. Getting a "quick tax refund" that comes back in a few days costs even more. Paying for tax preparation takes away from the value of the EITC. Low-income workers can get free help with tax preparation through a Denver Asset Building Coalition Tax SuperSite. 

Does the EITC affect public benefits?

In most cases, the EITC does not affect eligibility for benefits like cash assistance ("welfare"), Medicaid, Food Stamps, SSI, or public or subsidized housing.

Can immigrant workers get the EITC?

Many legal immigrants can qualify for the EITC, as long as they meet the eligibility requirements and have a valid Social Security Number. 

use the online eitc assistant to see if you qualify

IRS Online EITC Assistant

Find out if you are eligible for the Earned Income Tax Credit (EITC) by answering a few simple questions and providing basic income information. The program will also assist you in determining your correct filing status, determining whether your child(ren) meets the tests for a qualifying child, and estimate the amount of credit that you may receive.

how can I get additional information on the EITC?

For additional information on the EITC, read IRS Publication 596, or call the EITC
Hotline at 2-1-1 (in Denver) or 1-866-760-6489 (outside of the Denver metro area).