Earned Income Credit Rules
What is earned income credit?When a low to medium income family or individual has a child that fits certain criteria, then they would be eligible for an earned income credit or EIC. In most cases this credit is given to love income to medium income families to offset the social security payments. For more answers pertaining to Earned Income Credit Rules read below where Experts have answered these questions.
If a person is over 65 years old can they get earned income credit and what would the requirements be for the earned income credit?Generally the requirements would be. For the person to have a social security number, for the person to have earned income, the person cannot file their return as married filing separately, the person would need to be a U.S. citizen or resident alien, the person cannot be claimed as a dependent on someone else’s taxes, the person cannot claim the foreign earned income exclusion, and the person would need to meet the income limits for the year they are filing. If the person is over 65 years old and does not have a qualifying child, then they would not be able to claim the earned income credit.
Is workman’s comp considered earned income credit for taxes?In most cases when a person is receiving workman’s comp, then they would not be considered to be earned income and would not qualify for the earned income credit. Earned income can be salaries, wages, tips, self-employment earnings, union strike pay, long-term disability benefits, or non-taxable combat pay. The earned income does not include child support, alimony, unemployment, workmen’s comp, Social Security benefits, pension payments, and investment income.
Can a person file for the earned income credit as well as foreign tax credit?When it comes to the foreign tax credit, then the person can choose to take this exclusion due to it being voluntary. If the person chooses to claim the foreign tax credit, then they would not be able to claim the earned income credit along with it. If the person wanted to claim the earned income credit, then they can decide to not take the foreign tax credit and file for the earned income credit instead.
If a person’s earned income credit was disallowed, how would they re-apply for the earned income credit?The person would need to fill out and return form 8862 when they file their taxes the following year after the disallowance. The person would include the form in the information of their next year’s tax return. If the person meets all the requirements to claim the earned income credit, then they can file it the following year. With the foreign tax credit and the earned income credit, the person would need to see which credit would benefit them the most.
When a person has low to medium income, then they may qualify for earned income credit on their taxes. When the person is filing their taxes, then they may run into questions or concerns when it comes to the rules and regulations regarding the earned income credit. When these questions or concerns arise, then the person would need to consult an Expert to clear up the concern and questions.