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Earned Income Tax Credit not a four-letter word

Jim Hawkins • Dec 17, 2015 at 5:55 PM

“1913 wasn’t a very good year. 1913 gave us the income tax, the 16th amendment and the IRS.” — Ron Paul, American physician, author and former congressman

 If you are raising your child, your relative’s child, or a foster child, check out the Earned Income Tax Credit. The “EITC” can be one of the friendlier IRS abbreviations.

Q. What is the Earned Income Tax Credit?

 The EITC is a tax benefit for working persons with low or moderate income. If the EITC exceeds what you owe in taxes, you can get a tax refund. 

Q. What is the EITC for a taxpayer raising a child?

Single adults or a married couple with 1 qualifying child get a credit of $3,250 if their 2013 income is less than $37,870 (single) or $43,210 (married filing jointly).

 For two children, the maximum credit is $5,372 for income less than $43,038 (single) or $48,378 (married filing jointly).  For three or more children, the maximum is $6,044 for income less than $46,227 (single) or $51,567 (married filing jointly). 

A “qualifying child” must satisfy three requirements regarding relationship, residency and age.

Q. What is the relationship requirement?

A child must be a taxpayer’s son, daughter, stepson, stepdaughter, or a descendant of any one of them; brother, sister, stepbrother, stepsister, or a descendant of any one of them; or an eligible foster child (placed by an authorized placement agency).

Q. What is the residency requirement?

The child must have lived with the taxpayer for more than half of 2013. The EITC also applies to active duty military personnel. 

Q. What is the age requirement?

The child must be under 19 at the end of 2013, or under 24 and a full–time student, or any age if permanently and totally disabled.

NOTE: A smaller EITC of up to $487 is available for adults between 25 and 65 without children if income is less than $14,430 (single) or $19,680 (married filing jointly).

James B. (Jim) Hawkins is a general practice and public interest law attorney based in Sumner County. This column represents legal information, and is not intended to take the place of legal advice.  All cases are different and need individual attention. Consult with a private attorney to review the facts and law specific to your case. To suggest future column topics, call 615-452-9200.