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Earned Income Tax Credit Help

BTWIC wants to help early educators bring home more money at the end of the year through access to the existing Earned Income Tax Credits available through the state the federal government. The IRS estimates that between 20-25% of eligible workers do not take advantage of the EITC.

What is the Earned Income Tax Credit?

The Earned Income Tax Credit or the EITC is a refundable federal income tax credit for low- to moderate-income working individuals and families. Congress originally approved the tax credit legislation in 1975, in part, to offset the burden of social security taxes while providing an incentive to work. When EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.

Can I apply for it?

There are various rules for applying for the EITC. You must fall under the following categories:

  • Your Adjusted Gross Income and earned income must meet certain limits (listed below)
  • You must have a valid Social Security Number
  • You must have earned income from employment, self-employment or another source
  • You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen, or resident alien and choose to file a joint return and be treated as a resident alien
  • You Cannot use the married, filing separate filing status
  • You Cannot be the qualifying child of another person
  • You Cannot file Form 2555 or 2555-EZ (related to foreign earned income)

EITC 2016 CHART

I have children; can I still apply?

Your child must have a valid Social Security Number if you wish to be eligible for the EITC.

Relationship:

  • A “Qualifying Child” can be your son, daughter, adopted child, stepchild, foster child or a descendant of any of them such as your grandchild
  • Brother, sister, stepbrother, stepsister or a descendant of any of them such as a niece or nephew

Age. At the end of the filing year, your child was:

  • Younger than you (or your spouse if married filing jointly) and
  • younger than 19, or
  • younger than 24 and a full-time student
  • Any age if permanently and totally disabled

Residency:

  • Child must live with you in the United States for more than half of the year.

Joint Return:

  • The child cannot file a joint return for the year, unless the child and the child’s spouse did not have a filing requirement and filed only to claim a refund.

 

I do NOT have children; can I still apply?

There are additional rules for Workers without a “Qualifying Child”:

  • You (and your spouse, if filing a joint return) must have lived in the United States for more than half the tax year
  • Either you or your spouse, if filing a joint return, must be at least age 25 but under age 65
  • You (or you spouse, if filing a joint return) cannot qualify as a dependent of another person

There are tax centers throughout the state where early educators can have their taxes prepared and filed for free, including the earned income tax credit.

Want to find a free tax preparation site in your area? Use this guide released by the Massachusetts State Government.