Earned Income Tax Credit is Not Just for Parents

The Internal Revenue Service, or IRS, describes the Earned Income Tax Credit, or EITC, as 'a refundable federal income tax credit for low to moderate income working individuals and families', The credit is not reserved for parents.

Individuals with low income, and no children, may be able to claim the credit. The IRS states on their website that this is the group of people who often do not take the credit, even though they do qualify.

Those individuals who are between the ages of 25 and 65, who have low income, may qualify without children. Only one spouse for a married couple has to fall into the age requirements.

The basic rules and requirements for claiming the Earned Income Tax Credit are:

1. You must have a valid Social Security Number.

2. You cannot file married but separate.

3. You must have earned income from employment. This includes self-employment.

4. You must be a United States citizen or resident throughout the entire tax year. You are also eligible if you are a nonresident alien who is married to a United States citizen or resident alien if you are filing a joint return.

5. You must live in the United States for more than half of the tax year.

6. You cannot qualify as either a dependent of another person or a qualifying child of another person.

7. You cannot file forms related to foreign earned income.

8. Income and investment limits apply and vary by tax year.

You can view Earned Income Tax Credit income limit requirements, as well as any EITC tax updates and previous year information, by clicking here.

For the tax year 2008, the maximum an individual without children can earn to claim the EITC is $12,880, or $15,880 if filing jointly. The income thresholds rise with each qualifying child.

The maximum credit for an individual without any children is $438, and this amount rises based on the number of children.

Investment income must be $2,950 or less for the tax year.

What is qualified as earned income?

Earned income is any wages, salaries, and tips you earn by working for someone else or working for a business that you own. This can include union strike benefits, long-term disability payments if received before retirement age, and combat pay.

What is not considered earned income?

Earnings you may have had for the tax year that will not be considered as earned income are child support, spousal support, unemployment benefits, pensions, social security, interest, and dividends.

Who is a qualifying child?

A child must be your child, stepchild, eligible foster child, or descendant of one of them to be a qualifying child. Your sibling, half sister, half brother, stepbrother, stepsister, or any of their descendents may be a qualifying child as well.

An adopted child is treated as your own biological child. When speaking of an adopted child, 'adopted' means that the child was lawfully placed with you for legal adoption.

A foster child is any child that is placed with you by an authorized agency or court order.

The child must be under the age of 19 at the end of the tax year to qualifying for the Earned Income Tax Credit. A full-time student will qualify if they are under the age of 24 at the end of the tax year.

Permanent or totally disabled children are qualifying children regardless of their age.

The child, or children, must live with you, in the United States, for more than half of the year.

You can utilize the IRS's Earned Income Tax Credit tool to see if you qualify.

sources:

http://www.irs.gov/individuals/article/0,,id=96466,00.html

http://www.irs.gov/individuals/article/0,,id=150513,00.html

http://www.irs.gov/individuals/article/0,,id=96406,00.html

http://www.ssa.gov