Do you Qualify for the Earned Income Tax Credit?

A Virginia woman recently plead guilty to defrauding the federal government’s child tax credit program to the tune of more than $7.2 million. The woman admitted to filing more than 1700 false tax returns with identifications stolen from illegal immigrants. The IRS continues to fight an ever-growing trend of increased incidences of fraudulent claims of the Earned Income Tax Credit (EITC). The IRS estimates that it issued between $13.3 billion and $15.6 billion in improper payments in the fiscal year 2013. Because of this rampant fraud, claiming the EITC may flag your return for an audit, therefore, now, more than ever, it is important that you become informed as to IRS eligibility requirements for claiming the credit.

The Earned Income Tax Credit is a tax credit designed to assist low-income working families and individuals. The amount of the credit you may receive varies depending on your income level and the number of dependents you support. Often times, once the credit is applied, you may end up receiving more back in a tax refund than the total amount of taxes you paid through withholding. To qualify for the EITC, you must have earned income from wages, salaries or tips, from owning or running a business or farm, or from certain disability income.

The maximum earned income credit for 2013 is:

  • $6,143 if you are claiming three or more qualifying children
  • $5,460 if you are claiming two qualifying children
  • $3,305 if you have one qualifying child
  • $496 if you meet the rules for workers without a qualifying child

If you have one or more qualifying dependents, you can claim the EITC by filing a tax return along with Schedule EIC. If you meet the guidelines for claiming the credit without a qualifying child, you can file Form 1040EZ or the 1040A, or 1040.

If you believe you qualify for the Earned Income Tax Credit, ensure that you have all the proper forms and documentation to back up your claim. If you qualify, you can file a return claiming the credit not only for the current tax year, but also for the previous tax years of 2011, 2012 and 2013. The professionals at Nielsen Law Group can assist you in calculating your deduction and filing your return. Call (480) 888-7111 or submit a web request here.