By Kristen Doerer
In short: Wealthy taxpayers haven’t faced as much scrutiny.
For people who claim the earned income tax credit, also referred to as EITC, earned income credit or EIC, the audit rate has gone down less steeply than it has for wealthier taxpayers. Now, a person claiming the credit has as much of a chance of being audited as someone making 20 times more money.
But that shouldn’t deter you from claiming it if you are eligible.
What is the earned income tax credit (EITC)?
The earned income tax credit is a tax credit meant to help working people with low or moderate incomes. Claiming the credit when you file your taxes may reduce how much you owe or, better yet, give you a refund.
You can receive as much as $6,557 in tax credit, depending on your status. It’s for this reason that the EITC is one of the most popular tax credits, even if it’s one of the least understood.
Who can get the EITC?
- Individuals: If you’re filing taxes as a single filer without kids, you must have made less than $15,570 a year to claim the credit.
- Parents: If you have a kid or have taken a young family member into your home, you should see if you qualify for the EITC. As a single person with three or more kids, filing as head of household, you can make as much as $50,162 a year and still claim the credit.
How do I figure out if I qualify for the EITC?
The best way to figure out if you qualify for the EITC is to use the IRS’ EITC Assistant, an easy-to-use guide that will ask you yes or no questions to determine if you’re eligible.
There are a few basic qualifications for the EITC:
- You must have earned income from wages, a salary or a business.
- You must be a citizen or legal resident.
- You must have resided in the U.S. for more than half the year.
- If you’re married, you must file your taxes jointly.
- To claim a child, you must have a qualifying child. …