Earned Income Tax Credit (EITC) Relief
The Earned Income Tax Credit (EITC) helps low- to moderate-income workers and families get a tax break. If you qualify, you can use the credit to reduce the taxes you owe – and maybe increase your refund.
Earned income includes all the taxable income and wages you get from working for someone else, yourself or from a business or farm you own.
You may claim the EITC if your income is low- to moderate. The amount of your credit may change if you have children, dependents, are disabled or meet other criteria.
Military and clergy should review our Special EITC Rules because using this credit may affect other government benefits.
If you claim this credit, your refund may be delayed. By law, IRS must wait until mid-February to issue refunds to taxpayers who claim the Earned Income Tax Credit.
Types of Earned Income
- Wages, salary or tips where federal income taxes are withheld on Form W-2, box 1
- Income from a job where your employer didn’t withhold tax (such as gig economy work) including:
- Driving a car for booked rides or deliveries
- Running errands or doing tasks
- Selling goods online
- Providing creative or professional services
- Providing other temporary, on-demand or freelance work
- Money made from self-employment, including if you:
- Own or operate a business or farm
- Are a minister or member of a religious order
- Are a statutory employee and have income
- Benefits from a union strike
- Certain disability benefits you got before you were the minimum retirement age
- Nontaxable Combat Pay (Form W-2, box 12 with code Q)
- If you claim nontaxable combat pay as earned income, it may increase or decrease the amount of your EITC.
Earned income does not include:
- Pay you got for work when you were an inmate in a penal institution
- Interest and dividends
- Pensions or annuities
- Social Security
- Unemployment benefits
- Child support
Get prepared! Bring the following to make sure your return is correct:
- Valid driver’s license or photo identification (self & spouse, if applicable) Social Security cards for all persons listed on the return
- Dates of birth for all persons listed on the return
- All income statements: Forms W-2 and 1099, Social Security, unemployment, other statements, such as, pensions, stocks, interest and any documents showing taxes withheld.
- If self-employed or you own a business, bring records of all your income
- All records of expenses, such as, tuition, mortgage interest or real estate taxes.
- If self-employed or you own a business, bring records of all your expenses
- Dependent child care information: payee’s name, address and SSN or tax ID number
- Proof of account at financial institution for direct debit or deposit (voided check with ABA routing number) Prior year tax return (if available)
- Any other pertinent tax documents or papers
Other Credits You May Qualify For
If you qualify for the EITC, you may also qualify for other tax credits.
- Child Tax Credit and the Credit for Other Dependents
- Child and Dependent Care Credit
- Education Credits
As always, should you have any questions or concerns regarding your tax situation please feel free to contact us.