In today’s economy, it can be difficult to obtain a good paying job. Many hard working people do not earn a high rate of pay, and paying income taxes increases their financial burden. Working people with low to moderate income may qualify for the Earned Income Tax Credit, or EITC. The federal government has established this program to provide some tax relief for those individuals and families that qualify.
To be eligible for the EITC, an individual must have earned income from employment or self-employment, file a tax return (even if their level of income does not require it), and meet other certain criteria, such as having a valid social security number and filing status is not “married filing separately.” The amount of tax relief will depend upon the level of income and how many qualifying children the taxpayer is supporting in the household.In certain circumstances, the EITC can even result in a tax refund larger than the amount the taxpayer paid in through payroll withholding. Through 2012, working families with three or more dependents can take advantage of a temporary increase in the EITC. This tax relief credit previously maxed out at two dependents, and will revert back to that starting in 2013.The EITC is a tax relief program designed to enable low to moderate income families to keep more of what they earn. To find out if you qualify for the Earned Income Tax Credit, visit the IRS website at irs.gov.