Change Coming For Earned Income Tax Credit Calculation In 2011

There have been a few changes to the Earned Income Tax Credit (EITC) for 2011 and years beyond.  Some of these changes are pretty significant, others are more of the common variety.

No More Advance Payments

In the past, if a taxpayer was likely to be eligible to receive the EITC on filing his or her return, the law allowed the taxpayer to apply for and receive advance payment of a portion of the credit.  This is because the credit is refundable – even if you don’t owe any tax on your tax return, you’ll get something back with the EITC.

With the passage of the Education Jobs and Medicaid Assistance Act of 2010 signed into law August 10, 2010, the Advance payment of EITC was repealed, effective after December 31, 2010.

Third-Child EITC

The American Recovery and Reinvestment Act (ARRA) increased the EITC by 5% for families with three or more children.  The original law provides for EITC equal to 40% of the family’s first $12,570 when there are two or more children, and ARRA provided this additional credit for a third child (or more).  This provision was set to expire at the end of 2010, but the 2010 Tax Act extended the provision through the end of 2012.

Annual Limits

For 2011, the maximum EITC that can be claimed is increased to $5,751 from the 2010 level of $5,666.  In addition, the maximum income limit for EITC is increased to $49,078, up from $48,362 for 2010.  The credit varies by family size, filing status, and other factors, with the maximum credit going to joint filers with three or more children.

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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  • I did not have very much income last year, but my child earned over $6000, can I use his income towards the EIC on my return?

    • You can’t claim someone else’s earned income on your return. The only way to claim another person’s earned income is if you’re married to them, and you then file a joint return.

      If the income is unearned – that is, if it was investment income – then you could claim it on your return to save having to file a return for the child. This isn’t always the best route to go, it all depends on the amount of unearned income.

      jb

  • can a child that is 17 yrs old , no job at the present time but has worked 3 months during the year still have the unearned income tax credit in tn for 2013

  • I’m getting divorce. We have a 7 year old. My husband makes $100,000 per year I make about $15,000. My lawyer says that I can’t get tax exemption for our child until I make more than $25,000 Is this correct?
    Monica

    • I believe what your attorney is saying is that it doesn’t make sense for you to claim your child’s exemption at your income level because you’re likely not going to have to pay tax at all. As a Head of Household filer, your income is (more or less) exempt up to approximately the $13,000 level or thereabouts (I don’t have the figures right in front of me).

      Hope this helps –

      jb

  • ok my husband got laid off 10 months ago and still we havent found a job. we qualified for the child tax thing and should of gotten $1000 per kid we have 2 boys 7 and 4 yrs old. we have always received $2000 for are kids why did we only receive $423 per kid? we met all the requirments but now have no income coming in and still got way less then what we would get every year we have been doing are taxes.

    • Without seeing your returns I can’t say for certain, but here is what my guess is: the child tax credit is non-refundable, meaning that if you don’t owe tax of the full amount of the credit, you will only receive the credit up to the amount of tax you owe.

      However, there is an Additional Child Tax Credit available, which is available on Form 8812. This might not make a difference if the income for the year was less than $3,000 – see Form 8812 instructions at IRS.gov for more information.

      Hope this helps –

      jb

  • I file as head of house with three dependants, I made 5,200 wages and 8,700 unemployment and my return this year was smaller need help understanding why I was told only could have 2500 credit?

  • In 2012 i had a 1 yr old and a 1 month old. Can i get EITC on both babies or just my 1 yr old? Im also married filing jointly and our income was about $5500 together and i recieved $4600 in unemployement. Would the unemployement effect me getting the EITC?

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  • Hello and thank you for taking the time out to look at my question and try to help me. I am filing head of household I have 3 dependents but do to illness I was only able to bring home 6770.00 this year…will I still get the earned income credit

  • My son is 19, but still in school. Well he was over 1/2 of 2012. He fell behind, due to a learning disability. Are there any exceptions to the rule in regards to receiving the EIC, or does the under 19 rule apply no matter what……even if they are still in school and living at home? Thank you.

    • The rule is that the qualifying child must be under age 19 at the end of the year, or under age 24 at the end of the year and a student. If your son was a student for more than half of the year I believe he will qualify as a qualifying child for EIC.

      jb

  • I was wondering if I filled seperatly from my husband could I claim one child with earn income credit and get the refund bythe way I dont have a income but could this be done? he would still have 2 kids to help with his taxes but I would like to see if we could increase our refund by trying to file seperatly?

    • One of the requirements for Earned Income Credit is that you cannot use the filing status “Married Filing Separately”. In general filing separately doesn’t usually improve your situation, based on my experience.

      jb

  • i have a question, me and my husband have 5 children that we claim every yr, i dont work but my husband does he will get a 1099 at the end of the yr he has made about 25,000 for the yr of 2012, can you please help me out on about how much our refund will be.. and they have him file married jounting every year, but i dont work… thanks for your help

  • Thank u Jim for all the helpful info u provide. I am a HoH mother with 7 children. 6 of my children are from a deceased man. I receive no money for them from any gov source. I am a student who does ws. I live with my 7th childs father. He’s filing for the 7th child. is it okay for me to file all 6 other children. am i eligebile for eict credit. I was approved for 5000 ws. although ill only receive 2500 this yr for my 1 st semister. please let me know. Shauneetam@yahoo.com

      • No the Government will send you a letter telling you that the qualifying child must have li ed with you for most of the year. My son was also a couple months old and we were denied and received a letter.

        • A qualifying child must have lived with the taxpayer for more than half of the year – and if a child was born or died during the year the child is treated as having lived with the taxpayer for the entire year if the taxpayer’s home was the child’s home for the entire time the child was alive during the tax year.

  • I have 3 kids one was already 19. They gave us the EIC for family w/ 3 kids.. Then they gave us extra child tax again for my 19 yearold. Doesnt that mean they did it wrong? I got credit for my oldest twice?

  • If I earn 16000.00 in 2012 and I am a single a parent claiming head of house with 2 kids will I qualify for EIC

  • My question is if you are not allowed to claim the EIC but have 2 children and only make on average 10,000 yearly from employment do you still get any refund at all?

    • Dave, without seeing your actual return or your paycheck information to determine withholding versus tax possibly owed, it is impossible to tell whether you will get a refund.

      jb

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  • I withdrew about $5000 from my 401k in 2011. And has about $20k income last year. I have three children and filed joint returns. Does the 401k withdrawal make me ineligible for EIC? Because I read somwhere that investment of >$3100 makes ineligible for EIC. Is my 401k withdrawal considered investment?

    Thanks

    a

    • You can work this out for yourself by going to http://www.irs.gov and looking at the information available in the 1040 central section of the site.

      I simply don’t have the time to go through and make estimates for everyone that wants to know – hope you understand.

      jb

  • if I am filing seperate but married due to a pending divorce and made only $5000 last year does it do me any good to claim my two children?

    • Probably not – your own exemption and standard deduction will reduce your gross income to zero taxable without claiming the children. Of course, without seeing the actual returns I can’t say with any certainty whether or not it’s in your favor.

      jb

  • Many couples rip off taxpayers by filing separate returns and each claiming 2 children(they have 4) and get medical for children on top of this

  • Hi Jim,

    I have heard rumors that when I file next January 2013 for the year 2012 there will no longer be an earned income tax credit is this true? Thanks

  • _jim,
    Hello, my tax person informed me that since their are no advance payments, the IRS figures out if you qualify. Is this true? If you are receiving refunds from both State and Federal would you receive a third check if you qualify for the EITC?

  • Suzanne,

    I have to apologize as I told you the incorrect answer. The only way that you can split the benefit (dependency and EIC) between two people is if the parents of the child are divorced or separated and not living together. If the parents are simply unmarried and living together then one or the other parent is allowed to take all of the benefits – they cannot be split.

    Sorry for the confusion.

    jb

  • Do I include my state unemployment compensation when figuring my 2011 taxes? Everything I have read says include 1099-G, but the 1099 I received is not a “G”.

    Thank you.

  • HiJim,
    Question for you on EIC for non-married people that live together with one child. Can one parent claim the child as dependent with head of household status? This parent makes to much to qualify for EIC. Can than the other parent claim the child for the EIC? Turbo tax in the past allowed you to select EIC only selection – not dependent status. Is there any difference between dependent and qualifying child? Do they mean the same thing. Did the laws change for 2011 pertaining to this.

    Thanks,
    Suzanne

  • TAE,

    From your description it appears that you would be eligible to claim EIC. You will need to fill out the Worksheet B in the 1040 instructions to complete the EIC filing (if your tax software doesn’t do this for you automatically. This is because you’re considered self-employed by virtue of receiving your income reported on the 1099.

    Hope this helps –

    jb

  • I’M a 1099 transporter my pay was 51k but only brought 30% of it home after fuel and road fees.I also have a w-2 for 5300. I am claiming 2 kids do I qualify for eitc?

  • Jodi,

    I believe you’re interpreting the rules correctly: your son can claim his siblings as qualified children for EIC as long as he is not claimed on another taxpayer’s return as a qualifying child for the purpose of EIC.

    Hope everything works out for you –

    jb

  • Hi Jim- Thank you for sharing your knowledge! I scrolled through all the Q&A looking for a possible answer to my dilemma before asking.
    My question is this: I am on SSDI, which is unearned income. This disqualifies me from getting EIC for my children. I have a 19 year old, 13 and 11 years old. Last year my 19 yr old starting working in March. Due to tough financial times, he was contributing 90% of his checks to help keep us afloat. I researched and was under the impression that since the 2 younger are his siblings, he would be able to claim them. I filed him as Single and listed his brother and sister as dependents. This is his first tax year filing. Since this also made him eligible for EIC, he is being audited. My question is does he still qualify for the credit even though I (the natural parent)live in the same household? Just in case it came up,my two youngest children’s father has no parental rights. Thanks Again for time and patience!

  • Calli,

    Without seeing your return and all of your documents I can’t say why the program says you’re not eligible for the credit. According to the information you’ve presented, you should be eligible, but there must be some other circumstance that causes the ineligibility.

    You might try calling the vendor of the software you’re using.

    jb

  • My daughter is 21 and a full-time student. She earned $5000 this year. I earned $27,000. We meet the criteria listed on irs.gov regarding the earned income credit, however, it doesn’t talk about her earnings. Is there a limit that your dependent can earn?

  • Hi, I have a 15 yr old who lives with me. I tried to file online but the program said i was not eligible for EIC or the Child Tax credit. My total income was 1500 for 2011. Was my income too low??? WHy do i not qualify for those credits?

  • Candace,

    Not sure if Bruce is going to answer you, so I’ll give it a shot.

    Yes, your husband’s income can be excluded, which sounds like it very much works in your favor for this credit.

    Please pass along my thanks to your husband for his service. And accept my gratitude to you and your family for your sacrifices while he is away.

    jb

  • Bruce,

    My husband is active duty AF and spent 6 months deployed to Afghanistan in 2011. We are filing a joint return again this year, and we have 3 qualifying children. His earned income is normally so high $80K+ we wouldn’t even consider applying for EIC. But our tax software showed we are eligible…and I’ve looked through the EIC pub…looks as though we’re eligible, but I don’t want to flub this up! Earned income is $33095 this year b/c the other $52K+ is “combat excluded.” Way I read it is that we are eligible for upwards of $3K in EIC. Wondering if this is a nice thank you for his service from Uncle Sam, or if I’m just missing something. ? Is there some caviat that would preclude us from claiming EIC? Something just doesn’t seem right about it. Thanks.

  • Hi I want to know if I claim my sister because I helped her this year because she was not elligible to work because she was pregnant. She is a 19 year old college student will I recieve EITC for her?

  • Stephanie,

    Each child can be claimed on only one return for EIC, child tax credit, and/or dependency. If he’s already claimed both children for EIC, you can’t claim either child for EIC.

    The way to resolve this is for your ex to file an amended return, either showing only one child under EIC or no children under EIC. The alternative is for you to go ahead and file your return with no children claimed for EIC (but I’m guessing you don’t want to do that).

    You should not attempt to file your return claiming either child for EIC until his amended return has been filed, as the system will reject your claim to the child (or children) that has already been listed on his return.

    jb

  • I am divorced this past year. He and I have 2 children. We agreed we would both claim 1 child as a dependent because we have JOINT custody on both. We are also joint residential parents. Can I claim both children under the EIC? I know I can claim the one that is considered my dependent. He had his taxes done and they allowed him to use each child under EIC. I will get a significant amount more if I can do so as well

  • Hi Jim, last year i only work 2 months and i make 6.595.04 dollars then i quit my job to go school i have one child im going to claim her as child tax credit because she lives with her mom! and do i qualified for Earned income credit?

  • Why is the age limit at 25? I am 22 and should qualify for the single filing status, no dependants. I have worked, pay my own bills and wish I could benefit from this credit. I don’t understand why they set it at 25….a lot of people work that are under 25!

  • Angela –

    Without seeing the actual return I can only guess as to what might make a difference from last year to this year.

    One thing that stands out is that you mentioned you claimed a 15- & a 16-year-old last year. If that’s true, then this past tax year the 16-year-old would be 17 – and that’s above the limit for the child tax credit, so that’s a potential $1,000 reduction.

    Other than that I’d have to review the return and all of your documentation from both years to determine what the difference is. If you’d like me to do a complete validation of the return, you can contact me at my office (click on my name for contact info) and we can work out an arrangement regarding my fee for this service.

    jb

  • Last yr I received over 6,624.00 back claiming a 15 & 16 yr old. I just done my taxes myself online as usual and my expected return is 987.00. Nothing has changed since last yr on my end so do you have any explanation as to why the cut? It was my understanding that 16 was the cutoff for the most back for eic. Has the laws changed?

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  • Fatima –

    First of all, I don’t know anything about TaxAct software, so I can’t say for sure why this may be. You might try calling their hotline (if they have one).

    Otherwise, if your property tax, mortgage interest and other deductibles are not more than the Standard Deduction, or if for some reason you are required to use the Standard Deduction, your outcome would not change since the Standard Deduction is being used. This is just a guess, since I haven’t seen the return.

    jb

  • Hello,

    I am filling jointly with my husband , I have 2 children .I am not working ,.I am using TaxAct but when I put some deductibles: property taxe, and mortgage interest the numbers do not change.

    Thank you for your help

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  • Matt,

    More withholding won’t do it for you, the income will still be the same. One thing that you might do is either contribute to a 401(k) (if you have one available) or to an IRA. That might help your situation, but I can’t make any promises, it still depends on what your income level is.

    jb

  • I need my Earned Income to be lower in 2012 to qualify for the EIC. Will having more income tax withheld from each paycheck accomplish this?

    It wouldn’t matter that the IRS kept too much. I would recoup it at the end of the year because my actual tax would be so low.

  • Maxine,

    I don’t use H&R software so I can’t say why your return calculates as it does.

    As much as I’d love to help everyone out, I simply do not have the time to validate everyone’s tax return calculations. What’s more, I could not in good conscience validate the numbers without seeing the actual documents (W2′s and so forth) and the filled out return (or preparing the return myself).

    If you’d like me to do a complete validation of the return, you can contact me at my office (click on my name for contact info) and we can work out an arrangement regarding my fee for this service.

    I hope you understand.

    jb

  • William,

    This is because the EIC, when you have qualifying children, is based on two figures: your earned (W2) income, and your AGI (which is your netted gross income). If the W2 income is above the level allowing EIC, then you are not eligible for EIC.

    Hope this helps –

    jb

  • Quick question: If I am a minister who opted out of social security do I still qualify for EIC? I was told the rules have changed and so I would not. My sole income in as a pastor. Thanks.

  • In reading my scolarship is 4926.00 my tuition is 3504.20. I have included the difference in other income, shouldn’t it only use that figure in calculating the EIC?

  • I am head of household, 3 qualifying children. I am in school. I have 8709.00 in income and $3504.20 in grants. Is the grants not considered income? The H&R software only gives me 3926 for an EIC. Shouldn’t it be more? Is there a credit for single moms going back to school?

  • Jim, thank you for having this forum available.

    I am married filing jointly, have 2 kids eligible dependents. W2 wages $51,250, has K1 from S Corp for minus $18500, we are material participant. That makes our total AGI $32,750 but the software says we are not eligible for EITC. Would you please briefly explain why?

    Thanks again.
    William

  • Hi Jim, Never mind my last question about the “Making work pay” credit. I have read that it was only for 2009 and 2010. there were rumors that it would be renewed but it never happened. Thanks again for all your help. I hope you are appreciated by all who visit your blog. Have a great day!

  • hi jim,
    first I want to thank you for responding to my previous questions.
    also i noticed that last year my tax preparer had gotten me a “making Work Pay” tax credit of $400. Is this credit still offered for 2011? I didnt see it in the H&R Block program I am using. Thank you again, Brian W.

  • Brian,

    Even though the unemployment compensation isn’t considered earned income, if it is taxable it will play into your eligibility for EIC, since this is based on your total Adjusted Gross Income – which includes all income, earned or not. That’s likely why the Block software is showing that you are not eligible.

    jb

  • hi Jim,
    I have 32696 in income from my job. i also received 10,604. My question is about earned income tax credit. I have 2 qualifying children and i am not married. ex wife is deceased. I have read that unemployment compensation is NOT considered earned income. If it is not considered income I should qualify for EITC with an income of 32696. is this right. H&R tax program just says I cant get it.
    Thanks

  • Hi Jim, my husband only worked 3 months and was in jail for the last 6 months & still is today, I am a stay home wife with one child … Can we or should file EIC ?

  • jb (and for those paying attention, no I’m not talking to myself):

    Thank you for the kind words. I hope folks get a benefit from what I’m doing, but it’s uncommon to ever hear back from folks after the question has been covered. I truly appreciate you taking a moment to express yourself – it helps to make this all worthwhile. You made my week!

    Thanks again –

    jb

  • Elaina,

    Filing status is determined as of December 31, and if you’re married at that time you’re considered married for the entire tax year.

    As such, unless you’re living apart, Head of Household status is not available to you: you can file married jointly or married separately.

    Unfortunately, a filing status of married filing separately is not eligible for EIC, and given the income level you listed above, by filing jointly your income is above the limits for EIC. You should still be eligible for the Child Tax Credit at that income level, as well as dependent care expense credit.

    Hope this helps –

    jb

  • Hello Jim,

    My husband and I just got married in Nov, 2011. I only earned $26,000 this year while he earned $65,000. I have two young children that are not his. Is it possible for me to file head of household? If not, with the combined incomes will we qualify for any EIC or any additional credits?

  • I am a US citizen and my husband is not. He has an ITIN and pays taxes. When we filed, it is not giving us EIC, our income is well within the guidelines. Does him not being a US citizen stop us from getting it?

  • my GF got back $5000 last year, single with 2 children. this year she is getting back $900 less. Her preparer told her the difference is due to a change in a particular EIC, but did not explain any further. She claimed roughly the same amount for both years, around 8-9 thousand. Any idea what change might have taken place in her case to cauase her to recieve $900 less?

  • Crissy,

    The Child Tax Credit is available for folks with a child under age 17 at the end of the tax year, and with a Modified Adjusted Gross Income of less than $110,000 if married and filing jointly. The MAGI limit is $75,000 for singles and heads of household, or $55,000 for married filing separately.

    jb

  • Wendy and Liyah,

    Without seeing your returns I can’t say why there is this difference. You can check with the provider of your software or have someone review the returns to see if there is something missing.

    Sorry I couldn’t help –

    jb

  • Hello jim. I am a single 20yo male filing taxes this year no kids. I made a little less than 22k this year and payed 1800 in taxes. I have 2 seprate w2s. One for 19919. And the other for around 2800. Do i qualify for any eitc? And for the 2nd w2. Do i even have to claim it due to it being only 2800? Thanks.

  • hey jim I am on the same boat as wendy but I made 25,000 more then i did last year and got about 4,000 less on my return this year with both of my kids..Everything is the same as last year but I just made more on my AGI

  • I was just curious about the $1000 per child. Does it matter how much you make or didnt make, im just wondering if its set as everyone gets $1000 per child or if it depends on how much u make to how much you will receive per child. Thanks

  • Jim I am wondering why it is when i did my taxes my EIC is almost $1000.00 less than 2010 year return and I made about 4,0000 more in income for 2011. Why is this?

  • Questions my spouse received unemployment in 2011 and I only made $3500 in 2011…….would we still qualify for the EIC since I did have some earned income?

  • John,

    The rule is that only one taxpayer can claim benefits for each qualifying child – dependent exemption, child tax credit, EIC, head of household filing status, and child and dependent care expenses.

    In the case of a divorced or separated couple, the noncustodial parent can claim the dependent exemption and child tax credits if the requirements are met; the custodial parent can then claim the EIC, head of household status, and child and dependent care expenses. If the noncustodial parent doesn’t meet the requirements for the dependent exemption and/or the child tax credits (or if by joint agreement the noncustodial parent relinquishes the claims), the custodial parent may also claim these as well.

    Hope this helps.

    jb

  • Lisa,

    As much as I’d love to help everyone out, I simply do not have the time to validate everyone’s tax return calculations. What’s more, I could not in good conscience validate the numbers without seeing the actual documents (W2’s and so forth) and the filled out return (or preparing the return myself).

    If you’d like me to do a complete validation of the return, you can contact me at my office (click on my name for contact info) and we can work out an arrangement regarding my fee for this service.

    I hope you understand.

    jb

  • I can’t seem to find this answer any where and I really would hate to mess this up. Can you claim EITC if you file head of household but claim no dependencies due to a divorce/separation agreement?

    Thanks

  • A person making $13,000 for the year, paid $1400 in federal taxes, filing single with one dependant – his refund is $5400, and earned income credit is $3094. Is this correct?

  • Is there a penalty for me to file my daughters 2010 return this year? she only made $530 and should get back about $30 (gas money for her). But since she didnt file them last year like she was supposed to, wondered if we could do it now, and if there will be a penalty?
    Thanks again.
    Jen

  • Myrna,

    Your child, being a student at age 19 is eligible to be your dependent so you can use his dependent exemption and he could be a qualifying child for the EITC if you’re eligible for that. The Child Tax Credit is not available for children age 17 or older.

    jb

  • Alex,

    Your first mistake is trying to find logic in the tax code.

    I don’t know why there is such an anomaly in the rules. Keep in mind that the age 25 requirement only applies if you have no children. If you’re under age 25 and have children you can qualify for EITC.

    jb

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  • On 2010 taxes we got the full EIC amount around $5000. In 2011 my husband worked as a temporary employee. The non-profit organization wanted to give him a 1099 instead of a W-2 since he was a temporary employee. We received the 1099 for $7000 and entered it into our tax software. Our EIC credit is only $400 this year because of it being on a 1099. Why is the EIC credit different because of the wages being on a 1099 and not a W2. Isn’t the EIC based on earned income?

  • ihave a son, he made 19 years old on january 2012,he still in high school. if i claim him as a dependant, do i get any credit, or anything for him.
    Thank You

  • Hi. the 24 years old person can’t be claimed as dependent (unless no income or disable)(1), at the same time he can’t take EITC (2) neither. While under 24 can have the 1st and above 24 can have the 2nd said above. I wounder why 24 years old people are the only group left in such disadvantage? Something is not normal here. If by tax law 0 to 23 years old can be children and 25 to 65 years old can be adults why 24 years old belong nowhere? I am trying to find logic there? Do you know one? thanks.

  • Alisha –

    From your description I would guess that you will likely be eligible for the Earned Income Tax Credit and the Child Tax Credit, and possibly the Additional Child Tax Credit. Without actually seeing your return information I can’t say for certain though.

    jb

  • Lin,

    Thanks for the comment. I too think there could be a benefit for a lot of folks if they’d read the other comments first, but we deal with what we have.

    I don’t have any answers for you regarding the age limitations on EIC. It seems like there is always someone being caught by the limits, but it can’t be open for everyone!

    Take care,

    jb

  • jb –

    You can still claim your son as a dependent even though he had income for the year. If he had any tax withheld he should probably file a return (but won’t claim himself as an exemption) to see if he will receive that as a refund.

    jb

  • Hi Jim,
    Your article and answers to all is incredible thanks…
    Just a shame some peole cant scroll for answers first before making you repeat over and over hats off your so patient to ….. just wondering do you know why there is a age specification for a reason???? and was it always same ages? really upset and will be advocating for change… why are young adults 24 and under working along with older seniors and being cut off from this being punished cause they maybe working? if they fall in the income bracket then they should be able for it as well. kids 19 or under 24 working get no EIC nor if not going full time to school but working get ripped. and any info or input thanks. EIC is for low income and to in prove economy well then why leave a lot behind???? upset lin thanks.

  • Mi son is 17; he goes to HS and works. He earned 8K +- (it was his to keep). I provided full support for him the whole year.
    What would be the best strategy to file our taxes?
    Can I include him as dependent and his income in my report?
    Get him to file separatedly?

    Any help/advice will be appreciated.

  • Hi I earned only 300.00 back on taxes I didn’t work much last year but I have two children what I eligible for so I can get some refund back

  • Jen,

    Whether or not your daughter should have filed a return last year depends on how much money she made, and whether or not there was tax withheld from the earnings. The same goes for 2011.

    If she made less than $9,500 she wouldn’t owe tax, but if there was tax withheld she may be able to get the withheld tax back.

    Hope this helps –

    jb

  • Jessica Marie,

    Unfortunately there is no credit for having paid off all your student loans – but good for you anyhow! Now you don’t have the loans hanging over your head and you have the payment amount available for other things.

    Regarding amending your taxes, you’ll just need to fill out a Form 1040X (amended return) with the changes to income and any other changes needed, and then submit it to the IRS along with the additional tax owed.

    Hope this helps –

    jb

  • Monica,

    No, you are not reading the table correctly. The table indicates that you don’t have to file a return if your gross income is less than $19,000 – and you indicate that your gross income is $47,000, since you’re filing jointly.

    I can’t comment on Turbo Tax’s calculation, I don’t use the product – but that credit amount seems pretty close to what the tables indicate for your gross income level.

    jb

  • Jim- I’m a single mom of a 3 year old- Last year I was got both the child tax credit and the EIC. My income last year was 1,000$’s of dollars more then this year. This year it says i’m not eligable for either one of these. I can’t figure out why. Can you help?

  • Jim,

    My daughter is 16, in 2010 she cleaned houses as a part time job. She did not file a tax return in 2011 for this income, should she have? Can she still file it this year or is it too late?
    Also, If I claim her on my tax return, can she still file taxes on her income? She is wanting money back, is why I am asking, but I don’t want it to decrease what my return is. If you could please just let me know what would be the most beneficial and legal way to go.
    THanks
    Jen

  • Hi Jim!
    I was wondering, I paid off all of my student loans with their interest last year with my refund. Does that change my filing this year with some sort of tax break? Also, I needed to ammend my taxes from last year because I had extra income that came in after I filed my taxes.. Advice on what I shjould do?

  • Hi Jim, My husband and i have 5 children and i made 17,000 for 2011 and he made 30,000.With 47,000, We qualify for EIC but when i did my calculations on turbo tax it had us only getting a $327 credit.I need some advice on this. Do i need to report my income? Am i reading this IRS table below right? If i make less than 19,000 i don’t need to report it? Then when we file joint, we will be able to receive the max amt of EIC back. PLEASE HELP OUR FAMILY. Thank YOU!
    http://www.irs.gov/publications/p17/ch01.html#en_US_2011_publink1000170407

  • Hello Jim,
    Quick question, me & my wife have 2 children & jointly made 46,800… Would we qualify for Eitc?….. Thanks for the help

  • Hi Jim,

    Thank you for your response.

    (Maura,

    Retirement funds aren’t earned income, so they would not normally impact the EIC calculation. However, retirement funds are a part of the AGI, which could impact a portion of the calculation.

    If you have no children and you earned in more than $18,700 (not including the retirement money), then you would not be eligible for EIC.

    jb)

    We do have 2 children ages 16 and 6. Am I thinking right when I say that we should have received EIC? We made roughly $26k of earned income and $18.9k of early retirement.

    Thank you,

    Maura

  • Maura,

    Retirement funds aren’t earned income, so they would not normally impact the EIC calculation. However, retirement funds are a part of the AGI, which could impact a portion of the calculation.

    If you have no children and you earned in more than $18,700 (not including the retirement money), then you would not be eligible for EIC.

    jb

  • Jess63,

    Without seeing your return documents I can’t say one way or the other if you’ll get a refund. It’s not simply a matter of knowing how many months you worked – it comes down to the amount of income, how much withholding there was, and other information needed to prepare the return.

    Sorry I couldn’t help –

    jb

  • Hi Jim,

    My husband lost his job this year and had to get his retirement out early to live on. It was almost $19k and they took about $4k out in taxes. Does this count as earned income towards us receiving EIC? I did his taxes on the tax brain calculator and it said that he should get the EIC and when we did our taxes the program that our tax person used said that we weren’t eligible for the EIC. We earned under $28k this year.

    Thanks,

    Maura

  • Hi Jim

    I’m a single parent I’ve worked five and a half months out if the year dye to a back injury.. I have a boy an a girl 1&2.. I was just wondering if ill be elligable for a tax refund.. I worked in a cafe for 4 months and I was a certified nursing assistant for a month and a half. And I get state help I was on mfip for almost 3 years with the cash portion but now I only get food stamps and medical assistance.. anyways I’m Jw if I meet the standards

  • My husband is the only one who works in our house, he made around 25,000 this past year. we have 4 children about how much earned income should we be able to get?

  • Monique,

    Under the present law, the provision for “counting” a third child for EIC is set to expire at the end of 2012 – so you have one more year with this provision in place, unless the law is extended again after the end of 2012.

    So, in answer to your question, when you file your 2012 return in early 2013, you will still have the “third child” option available for Earned Income Credit.

    jb

  • Hi Jim,
    I am a single mother, head of household, with one 3 year old. I was told by H&R Block last year that the EIC credit amount that I get back goes down after making $14K per year. Is this true? I’m trying to figure out how much money I will get back this year for EIC, if any at all. I’ve made $30K this year. Will I qualify for the full refund?

  • Hi Jim,

    I am filling married seperate and made 47,500. would it be beneficial for me to claim my two kids? Will I get a full credit for them?

  • In 2013, when I file my 2012 taxes, will I still be able to claim my 3 children for EITC. I hear 2012 taxes will be the last year to do so, then back to 2 children.

  • Hello I receive letter saying I might qualify for eic I wanted to ask that in 2011 my gross income was about 14,000 for the year I have a 7 year old daughter am a single parent do I qualify for eic and do I still have to file for my taxes this also what would I get the amount from eic

  • Michael,

    Without seeing your return documents I cannot make a recommendation or determine what refund you may or may not receive. You will have to work through the return with the information you have and determine that, or have a tax preparer help you do this.

    jb

  • Erin –

    Unfortunately, I don’t think there’s anything that can be done about it. I assume that the interest on the bonds was reported in your name…?

    Probably the more appropriate way to do this would have been for your grandmother to have cashed in the bonds and given you the money directly. This is to assume that she would have had a lower income that could absorb the additional interest without tax, or perhaps with a lower impact on her return.

    I know that doesn’t help your situation any, but it might help someone else in the future.

    The only thing that you might look into is whether a contribution to an IRA would make any difference for you. If your contribution was deductible from AGI, it could provide the reduction you need – but this is just a wild guess without knowing all the details on your return.

    Sorry I didn’t have better news for you.

    jb

  • Hi Jim-
    My husband moved out of our home in April. We have 4 children (ages 19, 14,7,5). The house is in my name and i have continued to pay all expenses that have incurred since he left. Our final court date is a few months out. It is my understanding that I am able to claim Head of Household and therefore would be eligible for the EIC. Is that correct?

  • My husband and I just prepared our returns and our EITC is nearly $1500 less than last year, but nothing has changed on our end. We have quadruple checked the numbers always with the same result. Is it more difficult to get the full amount of the EITC or are we doing something wrong?

  • Umm i have a question.
    i only worked last year in 2011 for only one month.. do i claim my kids when i get my w2 form and would i get anything back? or would i have to make an amount just to get any kind of income tax back

  • Dear Jim,
    I am a single mother of three, but only claim two because of an agreement with the father, and I have always qualified for the earned income credit. This year however I was given savings bonds from my Grandmother. I took them to the bank to cash them in, they didn’t ask if I wanted taxes taken out. I have filed my taxes and well, this hurt me with the earned income credit because the taxes on them were ruffly $3,500 and the limit to be eligible was ruffly $3,100. So about $400 dollars cost me a large amount of money. Is there something I could do about this? A little sore about this.

  • Daniel,

    If you provided more than half of the support for your brothers for the year, then you could claim them as dependents.

    Regarding how much you will get back, without all of your income and withholding information I have no way of knowing how much of a refund you may or may not receive.

    jb

  • Hi there, so I submitted 4 tax returns via free file fillable forms on Tuesday 1/17. After 48 hours all 4 returns were rejected with the following message:

    The IRS has rejected your federal return.
    This means that your return has not been filed.
    Here’s the reason for the rejection:

    On Schedule EIC, when there is a single Qualifying Child, the Earned Income Credit must not exceed $3,050 and the AGI must be less than $35,535 if Single, Head of Household or Qualifying Widower and less than $40,545 if Married Filing Jointly. When there are two Qualifying Children, the Earned Income Credit must not exceed $5,036 and the AGI must be less than $40,363 if Single, Head of Household or Qualifying Widow(er) and less than $45,373 if Married Filing Jointly. When there are three Qualifying Children, the Earned Income Credit must not exceed $5,666 and the AGI must be less than $43,352 if Single, Head of Household or Qualifying Widow(er) and less than $48,362 if Married Filing Jointly.

    All 4 returns are within these amounts and limits. Is this a glitch with freefilefillableforms.com? Should I proceed with a program rather than the fillable forms even though what I submitted is correct?

    Thanks,
    Karlita

  • My daughter and her husband and thier new daughter lived with us all of 2011 and did not have any income. Will they qualify for earned income credit or dependants or child tax credit or any types of other credits? If not im going to claim them as dependants.

  • To be eligible for the Child Tax Credit, your eligible dependent’s age must be under 17 (age 16 as of December 31st).

    Why would my refund be rejected if my childs DOB is 1-1-1995?

  • How can I get my money from an amended refund from last year do I need to just mail in the 1040x form I’ve already sent them all my information it was some kind of a problem

  • Hi, I was wondering, I am a single mother and I did not work at all last year, I live with my boyfriend and he and my parents help me out with giving me some money, Can I do an unearn income tax???

  • Steve,

    The credit for Elderly and Disabled has an adjusted gross income limit of $20,000 for a Married Filing Jointly couple where one is disabled. If your disability payments are not taxable you might qualify for the credit. Use Schedule R with your tax return to determine if you can claim the credit.

    jb

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  • I got SS disabilty this year, no lump sum. My wife works and I can not,w/the disabilty pay ment of 1228. per mo and my wifes job 17760.We have tol income of 32,496. I heard of a disable credit. Can my wife and I take it?

  • Heath –

    A 17-year-old today, who might turn 18 during 2012, will still be an eligible dependent as long as you are still providing at least half of the child’s support.

    I don’t know what law your friend thinks will change that – but it won’t impact dependent status for 2012.

    Now, a child who is age 17 or older is not eligible to be claimed for the child tax credit, so if that’s what you were counting on, you need to keep that fact in mind. But this isn’t a law that’s changing, it’s always been that way.

    Hope this helps –

    jb

  • I am filling out my W-4 for 2012. My friend said not to claim my 17 year ols as a dependent because the tax laws will change when I file in 2013. He said I will owe more money when I file and it is better to have them take it out of my pay check now.

  • I lost my job over a year ago. I very, very recently returned to work but only grossed 2000. Will I qualify for eic and the extra tax credit. I have 3 kids all under 17?

  • Hi jim if I’m married but i file separately from my husband
    will i received the EIC?

    WHAT IF I FILE SEPARATELY ON MY FORMS BUT I’M MARRIED CAN I
    DO THAT IN STILL RECEIVED EIC?

  • jim i am claim 2 kids this year ! made 17,500 i only claim me how much should I be looking at back under earn income tax credit

  • Laura,

    Without seeing the return I can’t say for sure why this would be – perhaps the child tax credit was limited because it is nonrefundable. This means that if you’ve received credit up to your tax amount the credit is limited to that tax, you won’t get more (from that credit) than you paid in tax. There is an additional child tax credit that is refundable which may apply in your case and could make up the difference.

    Hope that helps –

    jb

  • Hi,
    Why when my income was higher last year would I get my full 2000.00 child tax credit and this year I only am getting 1186.00? Also, if it says I qualify for 3700.00 for each child for the EIC would I not be getting that back. My return is showing 5940.00 & my taxable income was only $10905.00. Any help understanding this would be great. Thank you

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  • Jim, I had a child in Oct 2011, do I qualify to recieve the full $1000 child tax credit? I was told it would only be partial. Dallas, TX.

  • Jenifer,

    1) Earned Income Credit is still available at the federal level. I haven’t researched the Michigan state situation so I can’t say for sure if there is a credit there as well or not.

    2) A filing status of Married Filing Separately is not eligible for Earned Income Credit, so your friend will not be able to separate her income from her husband’s if they live together.

    jb

  • Sky,
    If you are married filing jointly with two children and your total income was $5,000, you will not have a tax obligation for the year. You should also be eligible for Earned Income Credit at that income level.

    Hope this helps –

    jb

  • Amanda,
    Gross taxable income will not include the amounts taken from your paycheck “pre-tax” – which typically will include your 401(k) contribution and insurance premiums. I’m not sure if your union dues are pre-tax or not – but it should state one way or the other on your paystub.

    jb

  • 2 questions:
    1- I live in Michigan, I thought for sure I read that they were doing away with the EIC. But now I’m wondering if that was something on the state level by Gov. Snyder.
    2- I have a friend who is married, she mentioned filing seperately from her husband so she would get the EIC, she has one child. He always has to pay in. Can she do this?

    Thanks for the help.

  • I am married with 2 children. My husband was un employed and i made 5,000 cash and will be 1099. Is that enough to get EIC and maybe not have to pay in?

  • So what should all be included in the adj income I have a 401k union dues medical and dental insurance is that all supposed to be included in my gross income

  • Joe,
    If you have provided half of your daughter’s support for the year she can be claimed as a dependent on your tax return. In addition, any amounts that you may have paid toward medical expenses would be deductible (if she’s considered your dependent).

    jb

  • hi jim im married with two kiddos my husband is the one who works an made about 50,000 this year does that mean we owe money?

  • Hi Jim,

    I made 36029 this past year and I have one dependent under 17, how will I know if I can get the max for earned income credit which is like 3,000 or so? I’m going to file head of household

  • Jim—My daughter (33) went thru liver failure in june-since then my wife and myself have supported her and her 2 children–i know i can claim the boys(3) but do i get any help for my daughter?

  • Tammy,

    Your filing status and the amount of your income are also deciding factors in determining an EIC amount, in addition to the children.

    Regarding the hold-up on returns for teachers claiming educator expenses, this happened last year because the provision had been extended late in December after being scheduled to expire. Since this was not the case for 2011 (the provision was available, not expired) there should be no delay for that reason on your 2011 return.

    jb

  • Hi Jim,

    I am a teacher, filing head of household, single with three children. Last year I filed the same way but did not receive the full eic or chid tax credit for each child. The children are 14, 12, and 2. I’ve read through the guidelines and each child is eligible for eic. Are there other factors used to determine the amount?

    Do you forsee another freeze on educator’s refund checks as last year? Everyone who claimed the educator tax had to wait an additional month to receive checks regardless of how early we filed.

    Thank you for your help!

    Tammy

  • Hi jim I started working in june and according to my check stub my gross income is 10,000 .I have 4young children all under the age 5, the smallest being 1yr old.I am married but my husband is not a citizen and hasn’t filed his taxes in a few yrs and from my understanding he owes the irs, his income id say would be roughly between 15,000 at the most, would it be best to file seperatley since he owes the irs? And would I just get the eic for what I’ve worked?

  • hi Jim

    I have been hearing a lot of rumors that the eitc is not going to be applied for the 2011 tax year. is that true or will i still see the eitc on my return.

  • Hi, my question is I lost my job in Aug. cash out my 40k which was about sixteen thousand and taxed bout 4000. I made about 24 thousand this year will have to pay back and will get to claim EIC?

  • How does unemployment benefits affect the eic amount? My husband became unemployed last year due to the oil spill. He recieved approx $4,000 in benefits. He got a job a few months ago and has earned $5,200 there this year. Will the unemployment income be factored in at all for how much recieve for our EIC? We have 2 children, ages 8 and 2, and I do not work.

  • Ive heard Obama is trying to cut people from getting earned income credit this year.Are they going to stop giving eic this year?If not is Obama really trying to pass a law to cut out eic.

  • Hi Jim, the ARRA which allows us to have 3 or more qualifying children for EITC, ends at the end of 2012. Does that mean this is the last year for that , or two more years.Thanks

  • Dave, retirement account distributions should not be considered for calculating the EITC. Plus, your Roth distribution is ordered by non-taxed funds first, so the amount of recognized income is less (usually) than the distribution.

    Hope this helps –

    jb

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  • Lisa –
    Your EIC will be based upon your earned income, not your unemployment income. Since you only worked for two months out of the year, your EIC will be limited due to the (presumed) low income that you received.

    Hope this helps –

    jb

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  • \Hi Jim, Thank you for taking tise time to answer my question. I am a single mom and worked at the begining of 2011 up until the end of Feb. From there I went on unemployment and I see that the unemployment is not conidered taxable income? or did i read something wrong? I have to file a 1099 for the unemployment but wanted to know if being a single mom of 2 children, am I going to be able to use my unemployment1099 to file for taxes and will I get the EIC? Thank you. I look forward to your e-mail….

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  • Chris –

    If you don’t take any money out of the IRA account, it is not income to you. As such, it would not be counted on your 1040.

    When you do take money out of the account, you will have to include it in your income in the year you make the withdrawal.

    Hope this helps –

    jb

  • Jim,

    I have a retirement IRA that I cannot take funds out of until I am at retirement age because I will be penalized. Is this IRA considered investment income and would it go on my 1040? Thanks.

  • Lanna –

    The minimum income level to claim EITC is $49 for all filing statuses. At higher income levels the EITC will be greater (to a point).

    Your parents will not be considered children, but rather dependents, and as such they will not impact your EITC or any of the child tax credits. Claiming them as dependents will increase your exemptions which will have the impact of reducing your taxable income.

    Hope this helps –

    jb

  • Hi Jim:

    I first want to thank you for taking a lot of time to answer all of these questions; it has been extremely helpful to me. I do have a question for you that I hope you are able to help me with. My husband has been out on long-term disability since June 2010. We already know his LTD is non-taxable and is not considered earned income. In January of this year I began a job as a tutor, but I am an independent contractor. I am familiar with the maximum income amounts a person can earn and still be able to receive the EITC, depending on specific criteria. The position I began in January was to help with the extra expenses we have acquired with my parents who moved in with us in May, 2011. Is there a minimum amount a person filing jointly with four children (all under the age of 17) and two parents (we have provided 100% support all year) can earn and still be able to receive the EITC? I thought the minimum amount a person filing jointly could earn was $3000, but I am not able to locate that information. Also, will my parents, whom we will be claiming, be considered as children with the $1000 tax credit or will they fall under a different credit?

    I want to thank you so much in advance for your time and assistance,

    Lanna

  • Hey, Jim. I just lost my job. I only made $24,000 this year. I plan to do a distribution from my 401k which is about $5,000. I am just worried about the amount I will get back for the EITC. I have one child. Does the distribution limit the amount I receive when filing?

  • Dan –

    You are correct, the upper limit for income for Married Filing Jointly and three children is $48,000.

    There is no specific amount “per child” for EIC, it’s based upon your income, filing status, and the number of children in the household. Please use EITC home page (http://www.irs.gov/individuals/article/0,,id=96406,00.html) to check the amounts.

    And regarding your question about worrying about how much you make – if you make more money, you won’t need the credit as much, am I right? I wouldn’t let that bother me too much, if you can make more money that’s better for you and your family.

    Best wishes,

    jb

  • Hi jim

    The info on the site is good. I gotta a couple of questions for you. First off for the 2011-2012 tax year Ive made around $34,000 so far my question for you is I know the cut off for the eic is $48,000 is that correct or Im I mistaken. My second question for you is I know last year the EIc was $1,500 per child. What is the amount of per child for this tax year. Im married filling a joint return and i have three kids and my wife does not work she is a full time home maker. Should I be worried how much I am maker since this year is not done with. Any advice you have for me would be wonderful

    Thanks

    Dan

  • Angela –

    Your 1099 income would be treated pretty much the same as W2 income, although if there were expenses associated with that income you could possibly deduct those expenses from the income. It just depends on the nature of the income.

    At any rate, if your 16-year-old is earning income, as long as it’s not enough for her to have to file a tax return or to be considered her own support, it shouldn’t have an impact on your EITC eligibility.

    From the information you’ve provided, it appears that you should be eligible for a credit.

    Hope this helps –

    jb

  • Thank you for this service. Single mom, head of household, My income will be about 24,000. I will have a 1099 for 2400.00 this year. Does a 1099 change anything? I would just add all income right? Also my 16 year old daughter works now part time. Her income would not matter would it? Am I still okay for earned income? Again, many thanks

  • Michelle,

    Yes, there is a difference between filing Single and Head of Household. Essentially, you can file as Head of Household (HoH) if you provide a home for a qualifying individual and you are unmarried or considered unmarried for tax purposes.

    Children under 17 qualify for the child tax credit, as well as for EITC. With an income of $11,200, you would likely have to file for the additional child tax credit since your tax will likely be reduced to zero by the other credits. By filing for the additional credit you may receive an additional refund of up to $3,000 if this is the case.

    Hope this helps –

    jb

  • I am confused on whether I can file as head of household for my two kids as a single parent with unearned income of about 11,800 and my two kids are under 1 and i am collect ssdi and that will be my main income.

  • Is there an difference in filing head of household & single? Also i have 3 children under 17, would they all qualify for the child tax credit & the eitc if I only made $11,200??

  • I believe the EITC and the EIC are being confused by alot of people.

    Are they not two completely different tax credits, both depending on household size and income of course, however the EIC can be more or less depending on your actual taxable income. Also they have to be filed one or the other, and cannot both be taken advantage of by the same tax filer???

    True?

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  • Irma –

    EIC qualification is determined by income, and is also impacted by the presence of qualified children – not dependents. Your mother could be considered a dependent if you provided one-half of her support for the year, but clearly she is not your child (one of the qualifying factors is that a qualified child is younger than the taxpayer filing for EIC).

    So the answer to your question is that your mother’s situation would not have an impact on earned income credit for you.

    jb

  • Hi Jim,

    I have read all the posts and I looked at the tax calculators and on irs web sites i`ve only worked one month out of this year i have two kids whats the least amount of money you can make to get the EITC?

  • Angie –

    Yes, the EITC is based upon your income, and with a low income the EITC amount will be correspondingly low. You can check out the calculators on the EITC website (links above in other entries) to see for sure what your credit will be.

    Hope everything works out for you –

    jb

  • I am really concerned. I was laid off and now I’m attending RN school with two small children by myself. As of right now, I will be getting a w-2 for only about $720. Do they base the EIC off of a percentage of your income. I have a small amount of unemployment, financial aid, and student loans that have helped us to survive. But will I pretty much lose out because my actual income is so low? Thanks!

  • Hi Jim, I Really don’t understand taxes at all. I have 3 childern my husband is the only one working. Last year we recived over 10k because of the earned income credit. will this be likely to happen again? Someone has said things have completely changed around.

  • My wife has received a gift$13,000 from her mother who lives overseas
    DO we have to reported this gift in our income tax this year ?
    What forms should I use to report this gift?

    thank

  • I lost my job and took out early retirement from 401k will that make me lose my eic credit this year it was around 17,000 but then i payed taxes over 4,000 so i got about 13,000 back or so. That counts as income then and if I wont lose it will it lower it then the past years?

  • Alex –

    If you buy stocks and do not sell them, this is not counted toward EITC. But the income to buy the stocks had to come from somewhere, so the earnings that you used to purchase the stock would likely be counted at some stage toward EITC (unless it’s coming from a savings account or a gift).

    The dividend will be counted as income toward EITC calculations, so the factor you use in the EITC table would be your regular income from your job plus the dividends. This would reduce your credit.

    If your stock gained in value by the time you sold it, you’d have capital gains to include in your income, which would also increase the income factor on the EITC table, therefore reducing your credit. It doesn’t matter if you no longer own the stock.

    Hope this helps –

    jb

  • hi jim i was hoping you could answer this question. If i buy stocks lets say in amount of $5,000 but do NOt sell them just hold on to them will this disqualify me from getting EITC? i am only one that works married 3 kids income under 35k a year. 2nd question is if i do not sell the stocks but they pay out dividends of 6% yearly so like $300 a year would that disqualify me? and last 3rd question If i do have this stocks but i sell them in lets say october or november before tax year is up would that mean i have $0 investment income so i would i still get my EITC or would i not qualify since i had over $3,100 that year?

  • I have 3 kids (4yrs, 3yrs and 2 year old) my husband is the only one that’s working and makes about 38k. Would we get the full child credit for all three of them? Because last year our tax guy told us that we could only get partial on the third child he never really explained why.

  • Hi, i am married and have 2 eligable kids. I make right around the cut off for earned income credit about 47 to 50k. Question is if I put more into my 401k, will that ajust my earned income and agi so that I can get a earned income credit?

  • Derrick,

    The maximum amount of EIC can be had by a married couple with three children and an income less than $21,460. For a Single filer with three children, the income must be less than $16,450. The maximum amount of EIC is $5,666.

    jb

  • Jim ; What is the amount of earned income after all deductibles,
    to get the maximum amount of the EIC back? like for me I have one
    child and I see the maximum amount of EIC for me is 3084. So what income
    amount gets the maximum?

  • Hello Jim,
    I am just curious, I am really confused of the changes to next years or the 2011 to 2012 tax year. I have heard that the EIC will not be available. Is this true? I am married and my husband is the only one that works, we have two children three and will be 1 when we file. We qualified for the EIC this year. I heard that this will be the last time I can get a refund for the EIC for my daughter. Will we still qualify for the EIC next years of 2011 and 2012 tax years?

    Thanks
    Tina Tyler

  • Hi Jim,

    Thank you for this public service information. And thank you for your other charitable services locally. I benefited from counseling services you so generously offered office space and evening hours.

    I am also an income tax preparer for a seasonal retail company. It is something I enjoy doing more than my full time job. 11 years of service. I aspire to be an EA someday…lol!

    Thank you for all you do…and have done for others!

    Warm Smiles of Joy

  • Jim,
    I heard several rumors that the earned income was not going to be offered for next years income tax, is this rumor true??

  • Hi, Anne –

    I don’t know of any changes to age requirements for 2011 for EITC. The rule states that the child must be under age 19 at the end of the year or under age 24 at the end of the year and a student.

    Hope this helps –

    jb

  • Good day Jim!

    Thanks for all the helpful info here. Been reading through some of the posts and answers and have learned a lot! :D

    I have a quick question myself :D After reading about the death of advanced EIC payments above, I wondered if there will be any changes in the age requirements for dependent children in 2011 to qualify for EIC?

    Thanks in advance :D :D
    Anne

  • Jim,

    I was laid off for most of 2010 and earned a lot less than I have in the past. My question is my ex claims both kids as dependents and will again this year. We have joint custody of both kids. She is considered the custodial parent. Could I still claim my kids and qualify for the EIC credit.

    Thanks,
    Todd.

  • Hi, Angie –

    You’ve run into some classic government-speak. Nothing has changed for 2011 & 2012, the 2010 Tax Act just extended the already expanded credit for folks with three or more qualifying children.

    jb

  • Hi Jim,

    I read this on the IRS.gov site. “The Tax Relief and Job Creation Act signed into law December of 2010 provides a temporary increase in EITC and expands the credit for workers with three or more qualifying children. These changes are temporary and apply to 2009, 2010, 2011 and 2012 tax years.”

    http://www.irs.gov/individuals/article/0,,id=233839,00.html

    EITC already allowed three qualifying children in 2009. How has this act expanded the credit for three or more?

  • Jim, How much do you have to earn to be able to get the unearned income credit? (With two kids, married and spouse not working.)

  • Jamie –

    I don’t use that software, and so I can’t say why the EIC isn’t flowing through for you. From what you’ve described, the child (age 17) should be included in the figures. I would suggest calling the software support folks.

    Just to be clear, at age 17 this child would not be eligible for the Child Tax Credit, which is something different from the Earned Income Credit. Perhaps you’re confusing the two credits in your consideration…?

    jb

  • Tanya –

    Tools are a miscellaneous expense, and as such only the amount that is more than 2% of your AGI will be deductible. It’s possible that the cost of your tools is less than 2%… otherwise I wouldn’t know why this would have no impact on your return.

    Hope this helps –

    jb

  • when i input my info into the h and r block tax calulator I get an estimated refund of around $7000. I had an income of $17780 and taxes paid of $999…I am filing head of household with two kids 17 and 2 the two year old is permanently disabled. When i input everything inot turbo tax I only get $4100 it isn’t giving EIC for the 17yr old…….why is that?

    Jamie

  • If I use my tools as a job related expense, they should qualify for a deduction, why doesnt my refund increase when I put in that deduction?

  • i am filing head of household i live with my disabled dad and my brother who doesnt have employeement hes 21… i made around 22k last year… do i qualify?

  • Hi Jim. During 2010 I did not make as much money in the past because I only worked 4-5 months because of layoffs. I have 2 children 4, and 1. Will I still be able to claim them on my tax refund, or should I have their mother do it, since she made more money than me last year? She still is within the limits for that credit I believe.

  • Diana – the age limit for qualifying children with EITC is “under 19 at the end of the year” or “under 24 at the end of the year and a student”.

    You may be hearing about the Child Tax Credit, which is different. The age limit for this credit is under age 17 at the end of the tax year.

    Hope this helps –

    jb

  • I’ve heard a rumor that i won’t be able to list my daughter, who just turned 17 in October, on the earned income credit. Is there any truth to this?

  • Jessica, this is based on the amount from the EITC worksheet, which is essentially your gross earned income, or net earned income plus statutory earnings if self-employed.

    You can find the worksheet at the EITC home page (http://www.irs.gov/individuals/article/0,,id=96406,00.html) for more information.

    Hope this helps –

    jb

  • Josh – for a single parent with 1 child, the maximum for 2011 is $35,500. With two children, $40,363, and with three or more, $43,350.

    For Married Filing Jointly, one child, the max is $40,454; two, $45,373; and three or more, $48,362.

    For no children and single, the max is $13,400. No children and Married Filing Jointly, the max is $18,470.

    The “Single” category includes Head of Household and Qualifying Widow(er).

    jb

  • Hi Jim. Can you please post the complete table for the 2011 EIC? Specifically, what is the max income for a single parent with 1 child. In 2010 it was 35,535. I am assuming it will be similar…

    Also, are you aware of any changes being made to the calculation of earned income for 2011? As I am aware it is gross income minus pretax deductions (401k contributions, healthcare, etc).

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