Common Earned Income Tax Credit Questions Answered

The Earned Income Tax Credit or EITC is a tax credit bill passed by the Congress in 1975 intended for working individuals and families with low-to-moderate income. EITC grants a refundable federal income tax credit to eligible applicants. It can either reduce one's taxes or gives a refund.

How Do I Know If I’m Eligible for EITC?

The Internal Revenue Service (IRS) provides "EITC Assistant" tool, an online program set up on their website for an individual to know whether he or she is qualified to claim the earned income tax credit. This tool assists and determines someone's eligibility through a set of questions that are mostly answerable by a yes or no. Some of the basic questions are:

  •  Do you have a valid social security number?
  •  Were you a U.S. citizen or resident alien for all of 2008?
  •  Do you have earned income?

What are the EITC Requirements?

A set of requirements need to be met by a taxpayer before he or she can be qualified to claim the earned income tax credit:

  •  he/she must have a valid social security number
  •  he/she must have earned income from employment or self-employment
  •  his/her filing status should not be married
  •  he/she must be a citizen of the country or has been a resident alien all year, a nonresident alien married to a US citizen or a resident alien filing a joint return
  •  he/she cannot be a qualifying child for another person filing for EITC
  •  he/she cannot file foreign earned income forms
  •  he/she must meet the EITC Thresholds and Tax Law and other special rules that apply
What are the Most Common Reasons for Why an Application Is Denied?

Eligible taxpayers make common errors when they apply and file for EITC. The following mistakes often result to the delay or denial of the refund:

  •  he/she claimed a child who is not a qualifying child
  •  he/she entered or used an incorrect social security number
  •  he/she files a as single or head of household when married
  •  he/she reports his/her earned income incorrectly
How Do I Check on the Status of My Application?

The government will send the applicant a notice regarding the status of his or her application for the earned income tax credit refund. The recipient should respond to each notice and provide necessary documents. If the taxpayer gets Form CP 09 from the IRS, this means that he or she may be eligible for EITC. This notice instructs the applicant what to do next and how to claim the credit.
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