A Summary of the Earned Income Tax Credit From a Utah Accounting Firm

May 16, 2016 By Administrator

Taxes can be quite confusing. That’s why so many people hire a tax pro to help them file their taxes when April rolls around.



Have you ever heard about the Earned Income Tax Credit (EITC)? If so, maybe you’d like to learn more about it. If not, you very well may be especially curious now. Here’s everything you need to know:


What is the Earned Income Tax Credit?

EITC is a refundable tax credit (which means that even if you don’t owe taxes, you’ll still get the money through a direct refund) for individuals and families with a low to moderate level of income.


How do I qualify for an EITC benefit?

For you or your family to be eligible for EITC, you must:

  • Be a US citizen.
  • Have earned income from working for or owning a business.
  • Have a valid Social Security number, or a valid Social Security number for you and your spouse if you’re filing a joint return.
  • Not file as ‘married filing separately.’
  • Not file a Form 2555 or Form 2555 EZ (these are related to earning income from a foreign source).
  • Meet the EITC income limits (these change every year – you can find the limits for the 2015 tax year here).

Also, you must:

  • Be between the ages of 25 and 65.
  • Have lived in the US for at least six months.
  • Not have someone else claim you as a dependent.

Or, if you don’t meet any one of those previous three criteria, you must have a ‘qualifying child’ to receive an EITC benefit.


What exactly is a “qualifying child”?

For a child to be a “qualifying child”, they must pass the following four tests:

Test 1 – Age (Must meet one of the following criteria)

  • Under the age of 19 and younger than you, or younger than you and your spouse if you’re filing a joint return.
  • Under the age of 24 and a full-time student for at least five months out of the year (and still, younger than you and your spouse).
  • Permanently and completely disabled (any age qualifies).

Test 2 – Relationship

  • Must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of them (grandchild, etc.).

Test 3 – Residency

  • Must have lived with you (in the US) for at least six months during the tax year.

Test 4 – Joint Return

  • Must not have filed a joint return (one exception: it’s okay if the child filed a joint return with their spouse as long as it was only for a refund and they weren’t required to file).




If you have any questions about the earned income tax credit or anything else related to taxes, feel connect with us, your local Utah Accounting Firm by clicking the button below.

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