Earned Income Tax Credit

Earned Income Tax Credit (EITC)

We are dedicated to making sure that workers in our communities get their fair share of the return that is rightfully theirs.  Below are some of the most common questions asked about the Earned Income Tax Credit (EITC).  We hope the answers help you determine if you, or someone you know, is owed Earned Income Tax Credit money from the federal government.

Who can apply?
As long as you file a tax return, you are able to apply for the Earned Income Tax Credit, although not everyone who files will qualify to get an EITC refund.  If you did not apply for the EITC refund before you prepared and sent your taxes, you can file for the EITC if you file an addendum/a correction. Check with your tax preparer or get more information here about applying for the tax years (https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant)
Who qualifies for the EITC refund?
To qualify, you must have earned income from working for someone or be self-employed, running or owning a business or farm.  You also must meet these basic rules:

  • You (plus your spouse if you are married) and your children have Social Security numbers.
  • You earn income either working for yourself or as an employee.
  • You do NOT use the Married Filing Separately filing status.
  • You are a U.S. citizen or resident alien all year, a nonresident alien married to a U.S. citizen or a resident alien and filing a joint return.
  • Someone else cannot claim you as a qualifying child for the EITC.
  • You do not have foreign earned income for which you must file Form 2555 or Form 2555 EZ.
  • You do not have income derived from investments greater than $3,400 in interest, dividends or other investment income
Do I have to earn really low income to qualify for an EITC refund?
Simply put, no.  You can be eligible based on your Adjusted Gross and Earned Income, if you are filing jointly with someone or separately and how many children/dependents are living with you.  You do not qualify for EITC if you are married but filing separately. For the income limits, visit: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/do-i-qualify-for-earned-income-tax-credit-eitc


What is a “qualifying child” and how do I know if my child or children will qualify me for an EITC refund?
A qualifying child is a child who is in your household and in your care in the United States for more than half the year.

Relationship: A qualifying child can be your son, daughter, adopted child, step-child, foster child or a descendant of any of these, such as your grandchild. A qualifying child could also be your brother, sister, half-brother, half-sister, step-brother, step-sister or a descendant of any of these such as your niece or nephew

Age: At the end of the filing year, your qualifying child was younger than you (or your spouse if you are filing a joint return) and younger than 19; or at the end of the filing year, your qualifying child was younger than you (or your spouse if you are filing a joint return), younger than 24 and a full-time student; or at the end of the filing year, your qualifying child was any age and permanently and totally disabled.

Only one person can claim the same qualifying child. If a child qualifies for more than one person and one of the persons is a parent or parents, the non-parent can claim the child only if their Adjusted Gross Income is higher than the parent(s)

A qualifying child cannot file a joint return for the tax year unless the child and the child’s spouse did not have to file separately.

Be sure to ask your tax preparer if you have any questions about whether you have a qualifying child in your household. For more information on qualifying children, click here (https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/qualifying-child-rules)

Are there any restrictions that would make me not eligible when applying?
Unfortunately, there are certain types of income and payments that people received that are not considered earned income to qualify for the EITC refund. Here is a quick list of the types of income that alone would not be considered earned income for the EITC refund:

  • Child support
  • Retirement income
  • Social Security benefits
  • Unemployment benefits
  • Alimony
  • Earned income during incarceration

Below are some other types of income that are not considered for the EITC refund:

  • If you have foreign earned income for which you must file Form 2555 or Form 2555 EZ.
  • You have investments greater than $3,400 you are not considered eligible for the EITC refund

If you have any doubts or unsure if any of these types of incomes apply to you, please check with your tax preparer.

I didn’t make enough this year to need to file taxes. Can I get an EITC refund?
Yes, you can!  Workers who didn’t have income tax withheld or pay estimated income tax are eligible to receive the EITC refund. Since income tax is not the only form of taxation, you should file and apply for the EITC even if you have not made enough to make filing necessary.
I did not qualify last year. Should I apply?
YES!  Tax laws, regulations, and your circumstances change from year to year. Marriage, deaths, children, change of employment, are some of the life changes that will affect your eligibility as well.  Not qualifying in the past does not automatically mean that you will not qualify this year.
I think I may qualify for EITC for last year but did not apply. What should I do?
If you filed your taxes from a previous year, but didn’t claim the EITC, you can file an amended return and receive the EITC refund for the previous year if you complete the paperwork in a timely manner. If you didn’t receive the refund because you didn’t file, or because you weren’t aware you could claim a child that was living with you, you must file a separate return for each year in which you qualified. You can generally only file an amended return for the past three years. Use Form 1040X, Amended U.S. Individual Income Tax Return to file an amended return.
Where can I go to get more information on the EITC?
It is good to ask your tax preparer or a professional, but it is always wise to gather information for yourself.   The IRS website has reliable information on the EITC here (https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit) and has an EITC Assistant that will walk you through the process to see if you are eligible.

Finally, we at NeighborWorks Umpqua would be happy to help direct you to direct services in your county.  Contact Katelyn at volunteers@nwumpqua.org or 541-673-4909.