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VITA PROGRAM and EARNED INCOME TAX CREDIT by 2Leb73A

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									EARNED INCOME
  TAX CREDIT
Earn it! Keep It! Save It!
          2011
                    EITC
   What is the Earned Income Tax Credit
    (EITC)?
    The earned income credit (EITC) is a tax
    credit for certain people who work and
    have earned income in tax year 2011
    under $49,078. A tax credit usually means
    more money in your pocket. It reduces
    the amount of tax you owe. The EITC may
    also give you a refund.
                                EITC
To claim the EITC on your tax return, you must meet all of the
   following rules:
  Must have a valid Social Security Number
  You must have earned income from employment or from self-
   employment.
  Your filing status cannot be married, filing separately.
  You must be a U.S. citizen or resident alien all year, or a
   nonresident alien married to a U.S. citizen or resident alien and
   filing a joint return.
  You cannot be a qualifying child of another person.
  If you do not have a qualifying child, you must:
    • be age 25 but under 65 at the end of the year,
    • live in the United States for more than half the year, and
    • not qualify as a dependent of another person
   Cannot file Form 2555 or 2555-EZ (related to foreign earn
    income)
                  INCOME LIMITS
Tax Year 2011 earned income and adjusted gross income (AGI) must
   each be less than:
  $43,998 ($49,078 married filing jointly) with three or more
   qualifying children;
  $40,964 ($46,044 married filing jointly) with two qualifying children;
  $36,052 ($41,132 married filing jointly) with one qualifying child;
  $13,660 ($18,740 married filing jointly) with no qualifying children.

Tax Year 2011 maximum credit:
  $5751 with three or more qualifying children;
  $5112 with two qualifying children;
  $3094 with one qualifying child;
  $464 with no qualifying children.

Investment income must be $3,150 or less for the year.
                RULES
Who is a qualifying child?
  Your child is a qualifying child if your
  child meets three tests. The three
  tests are:
 Relationship

 Age

 Residency
         RELATIONSHIP TEST
To be your qualifying child, a child must be your:
 Son, daughter, stepchild, eligible foster child, or a
  descendant (for example, your grandchild) of any of them,
  or
 Brother, sister, half brother, half sister, stepbrother,
  stepsister, or a descendant of any of them (for example,
  your niece or nephew), or
 Adopted child. An adopted child is always treated as your
  own child. The term "adopted child" includes a child who
  was lawfully placed with you for legal adoption, or
 Eligible Foster Child. A person is your eligible foster child if
  the child is placed with you by an authorized placement
  agency or by judgment, decree, or other order of any court
  of competent jurisdiction.
            AGE TEST

Your child must be:
 Under age 19 at the end of 2011,

 A full-time student under age 24 at

  the end of 2011, or
 Permanently and totally disabled at
  any time during 2011, regardless of
  age.
          RESIDENCY TEST

   Your child must have lived with you
    in the United States for more than
    half of 2011.
     What is Earned Income ?

Earned income includes all the taxable income
  and wages you get from working.
There are two ways to get earned income:
 You work for someone who pays you or
 You work in a business you own.

Taxable earned income includes:
 Wages, salaries, and tips

 Union strike benefits

 Long-term disability benefits received prior to
  minimum retirement age
 Net earnings from self-employment
               EITC
What if I was denied the EITC last
 year?
 If your EITC for any year was denied
 or reduced for any reason other than
 a math or clerical error, you must
 attach a completed Form 8862,
 Information to Claim Earned Income
 Credit After Disallowance, to your
 next tax return to claim the EITC.
                          EITC
Where can I get more information?
 Find out if you are eligible for the Earned Income Tax Credit
  (EITC) by answering some questions and providing basic
  income information. Available in English and Spanish….



EITC ASSISTANT on www.irs.gov

Publication 596, Earned Income Credit

Going to a local VITA site for tax preparation

								
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