Earned Income Credit 2011

The Earned Income Credit is a tax credit for people who work and have moderate to low income. Tax credits are great because you will have more money in your pocket. You will either pay less tax or you will receive a bigger tax refund. Estimate your tax return now to see if you qualify for the Earned Income Credit.

The 2011 Earned Income Table is available through the IRS and is located in the instructions of the tax form 1040.

The Earned Income Tax Credit otherwise known as EIC can be claimed under certain circumstances.

Who can claim the earned income credit?

• You must have a Social Security number
• You must have earned income form being self employed or as an employee
• 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 age 65 at the end of the year
• Live in the United States for more than half of the year
• Not qualify as the dependent of another person
• Cannot file Form 2555 or Form 2555-EZ (related to foreign earned income)
• You must meet EICT income limits, Maximum Credit Amounts and Tax Law Updates

The IRS provides an earned income tax credit assistant which is like a tax software wizard that walks you through the steps of the worksheet. Most people like this tax credit because it can be worth up to $5,751 for the tax year of 2011 with three qualifying children.

Earned Income Tax Credit 2011 Information

Determining qualifying children for the Earned Income Tax Credit is based upon the guidelines of the IRS and the guidelines are very similar to the Child Tax Credit.

For your child to qualify for the Earned Income Credit there are three areas to consider.

1. Relationship
2. Age
3. Residency / Joint Return

For your child to qualify in the relationship category for the Earned Income Credit your child must be your:

1) Son, daughter, stepchild, eligible foster child, adopted child or a descendant of any of them like your grandchild.

2) Brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them like your niece or nephew.

 3) Adopted children are no different than biological children and foster children have to be placed with you by an authorized placement agency, or by judgement, decree, or other order of any court of competent jurisdfiction.

For your child to qualify in the age category for the Earned Income Credit your child must be:

1) Your child must be under the age of 19 at the end of the year and your child must be younger than you or your spouse if you file a joint return.

2) Your child must be a full time student under the age of 24 at the end of the year and younger than you or your spouse if you file a joint return.

3) Finally if your child is permanently and totally disabled at any time of the year, regardless of age.

For your child to qualify in the residency category for the Earned Income Credit your child must have:

1) Your child must have lived with you for more than half of the year in the United States.

Online tax software can help you claim your 2011 earned income tax credit if you qualify to claim it. You don’t want to accidentally claim a tax credit you’re not eligible for because the penalties and fines can put you back by thousands of dollars. Tax software such as TurboTax Online will make sure your tax return is accurate and the tax credits and deductions will be legitimate. Try TurboTax for free today. You don’t pay unless you decide to print or file your income tax return.