Tax News

Earned Income Tax Credit

The maximum earned income credit for tax year 2016 is:

  • $6,269 with three or more qualifying children
  • $5,572 with two qualifying children
  • $3,373 with one qualifying child
  • $506 with no qualifying children

To be eligible for EIC, both earned income and adjusted gross income (AGI) must each be less than the following amounts for 2016 :

  • $47,995 ($53,505 married filing jointly) with 3 or more qualifying children
  • $44,648 ($50,198 married filing jointly) with 2 qualifying children;
  • $39,296 ($44,846 married filing jointly) with 1 qualifying child; or
  • $14,880 ($20,430 married filing jointly) with no qualifying children.

Who is a Qualifying Child for EIC?

The rules for qualifying children for the purpose of claiming the earned income credit are slightly different than the rules for dependents. Thus it may be possible that a child qualifies as your dependent, but not for EIC; or might qualify you for EIC even though the non-custodial parent claims the dependent. Here are the qualifying children rules for the earned income credit:

  • Relationship test
  • Age test
  • Residency test, and
  • Joint return test.

 To claim a qualifying child or children you must attach Schedule EIC to your Form 1040.

If you will be filing for the EIC, you must bring the following documents to our office:

  • Social Security cards for dependents
  • Medical records (birth certificates, statement from heatlh care provider)
  • School records (statement from school the dependent is enrolled at)
  • Child care provider statement
  • Social service records or statement
Please call us if you are not sure of what documents to bring.