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Earned Income Tax Credit Rules
What is earned income tax credit?
credit is a benefit that is given to
payers in the US. It is a refundable benefit that can be claimed by people if they have qualifying children. In most situations, this may be claimed if the credit is more than the amount that an individual owes in taxes. Answered below by the Experts are some of the popular questions about earned income tax credit.
Can an individual who is eligible for earned income tax credits request their employer for advance payments during the year?
In most situations, an employee who is eligible for the earned income tax credit may request their employer for advance payments during the year. In order to do so, the employee may give the employer a completed W-5 form with the employee’s signature. More information regarding this may be found at the IRS publication 15, Circular E, Employer’s Tax Guide.
Can a collection agency garnish an individual’s earned tax credit to collect unpaid hospital bills in the state of Oregon?
In most situations, a collection agency may not be able to garnish an individual’s earned tax credit to repay unpaid hospital bills in the state of Oregon.
Would an individual’s earned income tax credit be affected if the individual has filed for a chapter 7 bankruptcy?
The earned income tax credit may be exempt from a chapter 7 bankruptcy. Hence, it may not be affected if an individual files for a chapter 7 bankruptcy.
Would tax credit earned by an individual be considered to be income while determining his/her social security disability benefits?
According to the Social Security Insurance (SSI), any amount of money in the form of cash or check that may be used to provide food and
to the individual may be considered to be an income. However, tax credit earned by him/her may not be considered to be an income for the purpose of determining the social security benefits.
Is it mandatory to file an individual’s tax returns to get the earned income tax credit?
If an individual is eligible for the earned income tax credit, it is mandatory for them to file their
in order to claim it irrespective of whether the individual is normally required to file their returns or not. The individual may have to file the returns within a period of 3 years from the
if they want to receive the credit amount.
How can an individual determine the amount that they will receive as earned tax credit?
The amount that an individual may earn as tax credit may be given on line 64 of their form 1040. However, if the individual had any prior payments or withheld
, those amounts may also be included in the credit.
How can an individual qualify for the earned income tax credit?
In order to qualify for the earned income tax credit, an individual may be required to fulfill the following conditions:
His/her adjusted gross income should be within the given guidelines.
He/she should have a qualifying child living with him/her for at least 6 months in a year
The child may be claimed as the individual’s dependent unless he/she permits the non custodial parent to claim the child.
Would an individual’s Individual Retirement Account (IRA) distributions be considered as income while calculating the earned income tax credit?
An individual’s IRA distributions may not be considered as income while calculating his/her earned income tax credit.
How can an individual claim the earned income tax credit?
In order to claim the income tax credit, the individual may have to fill and submit the Schedule
Earned Income Credit
(EIC) along with their tax returns. This schedule will give the IRS information about the individual’s qualifying child like his/her name, Social Security Number (SSN), age, relationship with the individual and the time period for which he/she lived with the individual.
Can an individual amend their previous tax returns in order to claim earned credit?
It may be possible for an individual to go back and make changes to the individual’s previous tax returns in order to claim earned credit. The individual may have 3 years time from when the returns were filed to claim the credit.
that determine and govern earned income tax credits can be complicated and difficult to understand. If you are not aware of these rules, you may either find it difficult to claim the credit or may not be able to claim it at all. Hence, it is important for you to understand every aspect of the earned income tax credit thoroughly so that you can claim it without any hassles. You may ask an Expert if you have any doubts or questions about this credit.
Recent Earned Income Tax Credit Questions
I live in the state of MA. I am divorced. In my divorce
I live in the state of MA. I am divorced. In my divorce decree it states my husband claims both my kids as dependents. Both my kids live with me full time. My daughter is in college living with me and my son will be starting college in the fall, also living
with. I have found out I am not eligible for the American Opportunity Credit because he claims as dependents. My question - is there any type of tax credit or deductions I can take or list since they both live with me full time. It is only my information that
is being used for their student loans and any financial aide availability. He has nothing to do with this. I am getting screwed in taxes, as he benefits for doing nothing.
I am currently on disability and have not worked for over 4
I am currently on disability and have not worked for over 4 years. However I just started receiving disability as of June this year. I received a letter from the Department of Children and families stating that I may be eligible for an earned income Tax Credit. I have also heard that I am eligible for a refund from my dental expenses which were necessary and quite expensive.
In 2013 I withdrew $2750 from my Roth IRA contributions (not
In 2013 I withdrew $2750 from my Roth IRA contributions (not earnings), but forgot to include this in my 2013 return. Just received a letter from the IRS saying I owe $1453 for this unreported "retirement income." The amount they figure is from tax credits being taken away (earned income tax credit, additional child tax credit, retirement savings line). I feel this amount is wrong. Even with the additional $2750 "income," we still were below the threshold for EITC. Do I file an amendment?
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