Earned Income Credit

What is earned income credit?

The earned income credit or EIC (also known as earned income tax credit or EITC) is a tax credit for certain people who work and have earned income of under a certain low level. Only low income taxpayers qualify for the federal earned income credit.

Why is earned income tax credit a very popular tax credit to claim?

Anyone who can claim the earned income tax credit should claim it because earned income credit is a refundable tax credit so you can receive a tax refund from the IRS even if you have no tax liability and had no income tax withheld.

Example of earned income tax credit

For example, if you owe the IRS $200 in tax liability on line 44 of tax form 1040 and your employer tax withholding is $300 as shown on your W-2. Then you can claim the earned income credit $2,015. Your tax refund would be $100 (tax refund from the withholding overpayment) + $2,015 (the earned income tax credit) giving you a total tax refund from the IRS or $2,115.

• Who Qualifies for Earned Income Credit?
• Earned Income Credit Married Filing Seperately
• Child Earned Income Credit
  • Multiple Claims on One Child For Earned Income Credit
  • Child Earned Income Credit Tests
• No Child Earned Income Credit
• Earned Income Credit Guidelines
• Earned Income Credit Chart
• Earned Income Credit Form