The Earned Income Credit (EIC): Extra money for people who work
If you struggle to get by from paycheck to paycheck, you should know about the
Earned Income Credit (EIC), a special tax benefit for people who work full-time
or part-time.
Millions of low wage taxpayers qualify. Even if you are not a U.S. Citizen, you may
still qualify for Earned Income Credit.
Information
en espanol Crédito por Ingreso del Trabajo(EITC)
What is Earned Income Credit?
The EIC is a special tax benefit for working people who earn low or moderate incomes.
If you fall into this category, the EIC can help reduce your taxes and increase your
income.
If you qualify for EIC and file a federal tax return, you can get back some or all of
the federal tax withheld from your pay during the year. You may also get some cash back
from the IRS. Even if you didn't earn enough to pay an income tax, you may qualify for
EIC.
Who can get EIC?
If you worked full-time or part-time at some point in 2003, you can qualify for the
EIC depending on your family income which must fall below the following income
guidelines:
Family size |
Single |
Married filing jointly |
||
Two or more children |
$33,692 |
$34,692 |
||
One child |
$29,666 |
$30,666 |
||
No children |
$11,230 |
$12,230 |
||
Source: Internal Revenue Service |
||||
How much is it worth?
The chart below shows the maximum EIC a family can earn. Your family income determines the actual amount of EIC you receive.
Family Size |
Maximum EIC |
Two or more children |
$4,204 |
One child |
$2,547 |
No children |
$382 |
|
Source:
Internal Revenue Service |
|
Who is a "qualifying child"?
The IRS considers a qualifying child:
- any child who lived in your household for more than half of 2003,
- is your son, daughter, adopted child, grandchild, great-grandchild, stepchild, or eligible foster child, and who also
- meets one of the following criteria:
- Was younger than age 19 at the end of the tax year, or
- Was a full-time student under age 24, or
- Was permanently and totally disabled at any age during the year
How do you get the EIC?
- Workers raising a qualifying child in 2003 must file either Form 1040 or 1040A and must fill out and attach Schedule EIC. Workers with children can't get the EIC if they file Form 1040EZ or do not attach Schedule EIC. Married workers must file a joint return to get the EIC.
(See below if you want free help filing your federal tax return.)
- Workers who didn't raise a qualifying child in their home in 2003 can file any tax form - including the 1040EZ. These workers write "EIC" (or dollar amount of their credit) on the Earned Income Credit line on the tax form. The do not file Schedule EIC.
- You must provide a correct name and Social Security number 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 part of their EIC in their paychecks
Workers raising children can get part of their EIC in their paychecks throughout the year. The rest will come back as a check from the IRS after the worker files a tax return. This is called the Advance EIC payment option.
Learn more about it from the IRS Advance Earned Income Credit Questions and Answers page
FREE help filing your tax forms
Many families that apply for EIC pay someone to complete their tax forms. This can cost $55 to $100 or much more. Getting a "quick tax refund" may cost you more than you will get back!
Low-income workers can get free help with tax preparation through local offices throughout New Hampshire.
The IRS certifies volunteers to provide free tax help through the Tax Aide Programof an organization called the AARP. To find the Tax Aide Program location nearest you, go to this Website, or call 1-888-227-7669.
Does the EIC affect eligibility for other public benefits?
No. The money you receive as EIC doesn't count as income in determining your eligibility for benefits like Temporary Aid to Needy Families (TANF), Medicaid, food stamps, the Women, Infants and Children (WIC) program, supplemental social security (SSI), or public or subsidized housing. Can immigrant workers get the EIC?
Many legal immigrants can qualify for the EIC, as long as they meet the eligibility requirements. For more information, call 1-800-TAX-1040.
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