Author: Salie Briones
Surviving and living are two different things. Living seems to be more of a luxury nowadays especially when your income is lesser than your expenditure.
Tax and other obligated bills are also some of the reasons people are leaning more on surviving rather than living. Fortunately, the US government has a program named EITC. This program is created to help workers with low and moderate earnings get a much-needed tax break.
Overview: The EITC
The Earned Income Tax Credit or EITC is a medium used by the United States government to support the economic security of low and moderate-income working families, especially those with children. The system reduces the personal income tax liability of low and moderate-income tax filers to help them make do for more of their income.
The EITC Qualifications
To be a beneficiary of EITC, you must be a low or moderate-income earn. Aside from meeting particular criteria, it is important to note that the number of credits changes if the eligible person has a disability, has children, or has other dependents.
Those who are claiming the EITC under the married filing separately tax status must meet the requirements imposed under the special rule in the American Rescue Plan Act (ARPA) of 2021, which is a coronavirus rescue package to help the US in recovering from the economic and health effects of the pandemic.
How to claim the EITC?
To claim the tax income credit, you must be a taxpayer (with no dependent) that has lived half of the tax year in the United States. Furthermore, you must be 19years or above.
Aside from qualifying, eligible individuals must also file for a federal tax return. But after filing taxes online, claiming the EITC might cause some delays in securing your refund. Fortunately, taxpayers can easily track their refund through Where’s My Refund? or the IRS2Go Mobile App.
If you are an eligible individual, ensure you include the schedule EIC if you are claiming credit with a qualified child. Also, note that any errors on your part will delay the refund further.
Some of the possible errors are:
- Filling with unqualified an unqualified child
- More than one person claimed the eligible child
- Last name and Social Security number do not match
- Married but filed as single
- Incorrect report of income and expenses
Wrapping Up
Qualifying for the EITC can also make you eligible for other tax credits such as:
Recovery Rebate Credit: This credit reduces the amount of any tax that eligible individuals owe
Advance Child Tax Credit Payments: This credit is a pre-payment of the Childs Tax Credit that is available after filing your federal income taxes. If you qualify for this credit, you may receive up to half of your estimated child Tax Credit as monthly prepayments for specific months.
Education Credits: These credits help with higher education costs by reducing the amount of tax owed on the tax return.
Child Tax Credit: This reduces the federal tax that parents owe by $1000 for each qualified child under 17.
Child and Dependent Care Credit: This program claims the credit for child and dependent care expenses on parents’ federal income tax returns and ultimately, reduces their taxes.
Aside from EITC, you can look into other mentioned options to aid with the burden of your taxes. These government programs are in place to help you not just survive but live and experience a better life with your family.