Are you eligible for Earned Income Credit?

Earned Income Credit (EIC) is a tax credit for taxpayers who work and have earned income less than the following limits:

• Three or more qualifying children: $43,352 ($48,362 if MFJ)
• Two qualifying children: $40,363 ($45,373 if MFJ)
• One qualifying child: $35,535 ($40,545 if MFJ)
• No qualifying children: $13,460 ($18,470 if MFJ)

A qualifying child under Earned Income Credit must meet the following requirements.

• Relationship – must be a son, daughter, stepchild, foster child or descendant of any of them.
  Note: child does not have to be your dependent
• Residency – child must live with you in the United States for more than half the year. Special circumstances such as school and business do not count against this requirement.
• Age – must be either (1) under age 19 years old at the end of the year; (2) under age 24 and a full-time student; or (3) totally and permanently disabled at any time during the year.

In addition to meeting the income requirements, the taxpayer must:

• have investment income under $3,100 (from $2,950)
• be a US citizen or resident alien all year and have a valid social security number
• use a filing status other than married filing separately
• not file Form 2555 with their tax return and can not be a qualifying child of another person
• If no qualifying children, the taxpayer must be:
• be age 25 but under 65 at the end of the year
• live in the United States for more than half the year, and
• not qualify as a dependent of another person

For workers without a Qualifying Child:

• Taxpayer (and spouse, if filing a joint return) must have lived in the United States for more than half the tax year,
• Either taxpayer or spouse, if filing a joint return, must be at least age 25 but under age 65,
• Taxpayer (and spouse, if filing a joint return) cannot qualify as a dependent of another person.

Maximum EIC for 2010:

• $5,666 for three or more qualifying children (new in 2009)
• $5,036 for two qualifying children
• $3,050 for one qualifying child
• $457 if you do not have a qualifying child

To claim the credit, complete Schedule EIC to indicate who the qualifying children for this credit, calculate the credit using Pub. 596 and report the amount on Form 1040, line 64.