Knowing about earned income tax credit is necessary for every American citizen as it plays an important role when you are residing there. The short form of earned income tax credit is EITC which works as a benefit for the people who are working on low wages/income.
It deducts the income taxes amount for you which can get you a refund. The income which you earn gets back to you in a form of credit to your account through the social security and works as an incentive for you. You can learn some of the interesting things about EITC here.
Qualification
The first thing which people have in mind that who can get qualified for the earned income tax credit. It is a huge advantage to you if you take it under your consideration and do not forget about it. If you are not sure about what to do then you can surely take help from the tax preparer who will provide you accurate information about it.
It will not only help you select the best for you but you will be able to make the right decisions as well for you and your family. It is important to know such benefits so that you can save and use it for your future plans.
People who earn less than $20,000/annum are eligible for this benefit. Even if they get the salary or they have their own business, they are eligible for it. It is not necessary that you are married or not, whether you have a child or not, these do not fall under the qualification matter.
Whereas, to be eligible you have to fall under some considerations like having a source of income in the household, being the U.S citizen and you should have a valid SSN for yourself if you are single and for your spouse if you are married along with your children if you have them.
Limits on Income
Well, if you are from the background of army or you are in army yourself then you are not eligible for this benefit. It does not serve the ones who have the basic allowance, as army provides for its staff.
There are nontaxable amounts which the army people get paid so they are not able to join this. With the help of earned income tax credit, you can always know your details through the army but you cannot be under the list of getting the credits back to your account.
Income from Investment
If you have an income coming from the source of investment then you will not be falling under the criteria of EITC. You will be rejected upon the basis of having an income from the rents, stocks, inheritance or any other investment which you might be indulged in. Even if you think that you can get in through that, you will receive the disqualification letter soon at your place so it is always better to do your homework and then move ahead with the next step.
Self-Employed
If you are someone who has your own business but you are not able to make more than $20,000/annum then you can surely apply for EITC. The payments get to you within time as you are eligible and finding the source by having your own business. Even if you have the strike payments coming in, you can always opt out for the self-employment and have the business sustained through which you are getting your income.
There are types of incomes which make you eligible if you have less than the designated money with you such as support for child, unemployment benefits, SSN benefits, alimony or retirement income. The earnings do not count in when you are working whereas, when you are not then these might count in your favor for sure.
Ages
One of the important factor which you have to keep in mind is the age when you can apply. The age limit is between 25-60 years so you are eligible to be a part of EITC. Keep in mind that you have to be under that age and get that for lifetime. So before you turn 60 and if you fall under the criteria, make sure that you make use of it wisely.
