Federal Earned Income Credit [EIC] allowances on United States tax forms are there as a lower income taxpayer relief. The EIC is a tax refund that applies to people between the ages of 25 and 64 years that do not have children, and to all other lower income people that have children living in their homes. Up to 25% of all people who are eligible for the Federal Earned Income Credit do not ask to have this refund money sent to them.
How much money is available on the EIC or Earned Income Credit?
The maximum refund that can be claimed is 4,824 dollars by people that have more than two children living in their home for longer than a six-month period out of the year. Parents, grandparents, older siblings, and foster care parents are just a few of the many possible caretakers that can claim a Federal Earned Income. A lesser amount is given to individuals or couples that do not have children, up to 438 dollars.
How do I claim my Earned Income Credit refund?
Our tax laws are constantly changing. Inside of the Federal tax instruction book, there will be a chapter on how to calculate the EIC money that belongs to you. This is a very easy calculation that is done through answering a series of questions that do not go onto your tax forms. Taxpayers answer the questions and then match their answer to a chart in order to know the refund amount to claim.
The Federal government has rules that must be followed in order to claim your refund. To claim a refund you must be a US citizen, or resident-status alien. Adults and their claimed children must have any one of the various types of Social Security cards. If one spouse is not a US citizen or resident-status alien, they must file all of their global income as US income on the papers in order to collect the Earned Income Credit refund money.
It is possible for taxpayers to amend past tax filings for three years in order to collect on any missed EIC refunds. The form to use for amended taxes is normally called 1040X, and it is available to download from the Internet. It is very important to put the right amendment year numbers at the top of this form, and to make sure that your individual tax situation does not require more than one form.
While considering the Federal Earned Income Credit, taxpayers may also want to consider collecting an EIC from their State Taxes if one is available for your area. Examples of places that have non-Federal EIC refunds include: - San Francisco, California, - Montgomery County, Maryland, - New York City, New York, - and 20 states or more. It is wise to apply for all possible Earned Income Credit refunds.