Last Update: Wednesday, July 23, 2014

ASK CARRIE- Earned Income Tax Credit Worth the Effort? PDF Print E-mail
Written by CARRIE SCHWABPOMERANTZ, Creators Sydnicate   
Thursday, 24 March 2011 01:51

Dear Carrie:

My daughter is a single mother who doesn't make a lot of money. I'm helping her file her tax return. I've heard something about an Earned Income Tax Credit, but I also hear that the qualifications are complicated. Is it worth pursuing for my daughter? — A Reader

Dear Reader:

You're right that the Earned Income Tax Credit (EITC), specifically designed to help lower-income working families, can be complicated. There are income qualifications and filing qualifications as well as eligible child qualifications. But don't let that stop you. It's absolutely worth the effort to sort out the details for your daughter.

According to the IRS, over 26 million people nationwide received nearly $59 billion in EITC dollars in 2009. If she's eligible this year, it could mean a significant amount of money in her pocket.

The best resource for understanding the requirements is probably the IRS Earned Income Tax Credit Assistant at www.IRS.gov. By answering a few questions and providing some basic income information, you can determine if your daughter qualifies. But before you go online, it's a good idea to first understand some of the basics.

WHAT THE EITC IS

The EITC is a refundable credit for people who work but don't earn high incomes (generally speaking, less than $50,000 a year). The important distinction here is that unlike most other credits, the EITC is refundable — meaning that not only could your daughter's tax bill be reduced, but she could also actually receive money back.

WHO IS ELIGIBLE

Three factors will determine your daughter's eligibility: her earned income, which includes wages, tips and self-employment income; her adjusted gross income (AGI), which includes earned income plus income from other sources, such as investments (investment income can be no more than $3,100); and the number of qualifying children she has.

Earned income and AGI for 2010 must each be less than:

• $43,352 ($48,362 married filing jointly) with three or more qualifying children.

• $40,363 ($45,373 married filing jointly) with two qualifying children.

• $35,535 ($40,545 married filing jointly) with one qualifying child.

• $13,460 ($18,470 married filing jointly) with no qualifying children.

Another consideration is filing status. Married couples must file jointly to claim the credit. If your daughter is unmarried and filing as a single taxpayer, there's no problem. If she's married, but her husband didn't live in her home for the past six months, she could possibly file as head of household and still claim the credit.

HOW THE CHILDREN QUALIFY

So far, that seems reasonably clear. But the rules become a bit more complicated when it comes to defining a qualifying child for the EITC. In most cases to qualify, a child must have a valid Social Security number and be:

• Younger than 19 (24 if your child is a full-time student; no age limit for a permanently disabled child).

• The taxpayer's child by birth or adoption, or a stepchild or grandchild. Siblings and children of siblings (nieces, nephews) may also be considered, as well as foster children with certain conditions.

• A member of the taxpayer's U.S. household for more than half the year.

You don't mention how many children your daughter has or the custody arrangement. If her children live with her for more than six months of the year, her situation may be quite straightforward.

But if she and the children's father share custody and there's the possibility that they could each claim the children, they will have to decide who will claim them. In a situation like this with two children, the parents could decide to each claim one child.

HOW MUCH YOU CAN CLAIM

If you're already thinking this isn't worth it, think again — because the amount your daughter may be able to claim is significant.

Depending on the amount of earned and adjusted gross incomes, qualifying taxpayers filing returns in 2010 can claim a credit for as much as:

• $5,666 with three or more qualifying children

• $5,036 with two qualifying children

• $3,050 with one qualifying child

• $457 with no qualifying children

Plus, many states offer residents an earned income tax credit, which increases the benefit. So by all means, it's worth your and your daughter's time to find out if she qualifies. She's lucky to have your help!

Carrie Schwab-Pomerantz, CERTIFIED FINANCIAL PLANNER (tm) is president of the Charles Schwab Foundation and author of "It Pays to Talk." You can e-mail Carrie at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Share
 






Team members care for thousands of the region's sickest children with heart conditions, including fetuses, newborns, infants, children, adolescents, and adult, long-term patients with pediatric cardiovascular conditions. At Children's families experience coordinated, next-generation care, delivered by a compassionate, multidisciplinary team of leaders in the pediatric cardiology field. One of the largest pediatric cardiovascular programs in the region. Studies have shown that high volumes are associated with high quality and better outcomes, because experience is a major factor in quality of care. Wort was traditionally prescribed in parts of Europe for depression (in addition to use as a general-purpose tea), and Chinese medicine developed elaborate lists of herbs and preparations. With the scientific revolution in Europe and the United States, the use of traditional herbal remedies fell out of favor with the mainstream medical establishment, although a few people continued to use and maintain knowledge of traditional European herblore. In the early 20th century, scientists began reassessing this rejection of traditional herbs in medicine. Vorzüge eines intakten und lebendigen Gemeinschaftslebens bewahren. Dafür sorgen nicht zuletzt gut 120 lokale Vereine. Als wichtiger Faktor im Kulturleben haben sich die zahlreichen Museen und einige Kunstgalerien erwiesen. Descriptive and quantitative transcriptome analyses are important for interpreting the functional elements of the genome and revealing the molecular constituents of cells and tissues. It is known that sperm function can be affected by ASG proteins, including the processes of capacitation and the acrosome reaction, as well as canadian pharmacy accutane sperm motility, DNA integrity and interaction with the oocyte. BSPs (bovine seminal plasma protein, unigene 64,588 and unigene 69,768), fertilin (unigene 17,270 and unigene 27,136), ACE (Angiotensin converting enzyme, unigene 7,164 and unigene 21,069), GPX5 (glutathione peroxidase, epididymal secretory glutathione peroxidase, unigene15860), Spermadhesin-1 (Acidic seminal fluid protein, aSFP). The reproduction-related transcripts identified in the ASG and testis transcritptomes in E. This interaction of PDC-109 with the sperm cell membrane results in an efflux of cholesterol and choline phospholipids, that appears to be important for capacitation. The main changes in spermatozoa that occur during epididymal maturation are the ability to move, recognize and bind to the ZP, and to fuse with the plasma membrane of the oocyte.. Oct 2004, Adelaide, Australia. Ziaian T, Augostinos, M. Relationship Between Acculturation and Mental Well-being Among Young Persian Women Living in Australia. Paper presented at the Educational Research conference, 18th November 2004, Adelaide, Australia. Ziaian T, Stress Management: an introduction of holistic coping strategies. A Four day Course for the higher degree students. Targeted molecular therapy for advanced epithelial ovarian cancer. Minimally invasive surgery for gynecological cancer. Pharmaceutical Sciences from Shizuoka College of Pharmacy (1976, Japan). He has completed his B. Prophylactic removal of nevi without clinically worrisome characteristics is not recommended. The reasons for this are practical: many individuals in these families have a large number of nevi, and complete removal of them all is not feasible, since new atypical nevi continue to develop. In addition, individuals with increased susceptibility to melanoma may have cancer arise de novo, without a precursor lesion such as a nevus. The disadvantages of screening include the limitations of available noninvasive testing methods and the risks associated with invasive screening procedures. ERCP is the gold standard for http://www.jerseycanada.com/jerseyatlantic/fnt/ultramer.php identifying early cancers and precancerous lesions in the pancreas..