IRS Tax Tip 2018-24, February 14, 2018
The earned income tax credit is a benefit for working people with low and moderate incomes. To qualify, taxpayers must meet certain requirements and file a tax return, even if they don’t owe any tax or aren’t required to file. Here are some things taxpayers should know about the EITC:
It’s Important to Review Eligibility
- Taxpayers who worked and earned less than $53,930 may qualify.
- Filers should review EITC eligibility rules if their household income or family situation has changed. They may qualify for EITC this year, even if they didn’t in the past.
- Taxpayers must file a federal income tax return claiming the credit. This is true even if a taxpayer isn’t otherwise required to file a tax return.
Taxpayers Should Understand the Rules Before They Claim EITC
- Taxpayers who are married and file a separate return don’t qualify for the EITC.
- Filers must have a Social Security number valid for employment for themselves, their spouse if they’re married, and any qualifying child listed on their tax return.
- Taxpayers must have earned income. This may include earnings from working for someone else as an employee or being self-employed.
- Filers may be married or single, and with or without qualifying children to qualify. For a child to qualify, they must have lived with the taxpayer for more than six months in 2017. In addition, the child must meet the age, residency, relationship and joint return rules to qualify. Filers who don’t have children must also meet the age, residency and dependency rules.
- U.S. Armed Forces members serving in a combat zone have special rules that apply.
The Credit Can Lower Tax Owed or Result in a Refund
The EITC could be worth up to $6,318 for qualified taxpayers.
Taxpayers can Take Advantage of Free Services to Help Claim the Credit
- For those who do their own taxes, the best way to file a return to claim EITC is to use IRS Free File. Free brand-name software will figure out taxes and the EITC automatically.
- IRS Volunteer Income Tax Assistance, or VITA program, offers free help at thousands of sites around the country.
EITC-Related Refunds Expected in Taxpayer Bank Accounts Starting February 27
- By law, if a taxpayer claimed either the EITC or Additional Child Tax Credit, the IRS can't issue the refund before mid-February.
- This applies to the entire refund, even the portion not associated with these credits.
- The IRS expects the earliest of these refunds to be available in taxpayer bank accounts or on debit cards starting on February 27, 2018. This is if the taxpayer chose direct deposit and there are no other issues with the tax return.