What is the earned income credit and who qualifies for it?
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The earned income credit (EIC) is a refundable tax credit available to certain low-income individuals who have earned income, meet adjusted gross income thresholds, and do not have more than a specified amount of disqualified income (excess investment income). If you file a federal tax return and meet all applicable requirements, your income tax (if any) will be reduced and you might receive a refund.
To qualify for the EIC, you must meet all of the following requirements:
Must have earned income
Tax return must cover a full 12 months (unless a short period is filed due to taxpayer's death)
Filing status cannot be married filing separately
Cannot be a qualifying child of another taxpayer
Must not have filed forms related to foreign earned income
Must have no more than $3,600 of disqualified income (2019)
In addition, special rules will apply to taxpayers who have qualifying children and to taxpayers who do not have qualifying children.
For more information, consult a tax professional.
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Stern, Kory, Sreden & Morgan, AAC