Earned Income Credit (EIC) is a tax credit available to low income earners. In some cases the EIC can be greater than your total income tax bill, providing an income tax refund to families that may have little or no income tax withheld from their paychecks. Use this calculator see if you qualify for the Earned Income Credit, and if so, how much it might be worth to you and your family. This calculator creates estimated values for the current tax year. Filing statusChoose your filing status. The ‘Filing Status’ table summarizes the five possible filing status choices. Your filing status determines the income levels for your Federal tax bracket. It is also important for calculating your standard deduction, personal exemptions, and deduction phase-out incomes. Your marital status as of the last day of the year determines your filing status. Filing Status
Number of qualifying childrenEnter the number of children in your family that qualify for the Earned Income Credit (EIC). The IRS has certain requirements that must be met to have a child considered.
Earned income Self-employment income Include any self-employment income where you were required to pay self-employment taxes. The EIC rule requires you to reduce your self-employment income by 1/2 of your self-employment tax bill.Investment income Investment income includes the total of any of the following: Taxable Interest, Tax-exempt Interest, Capital Gains (do not include any capital gain or loss from the sales of business property), net income from any passive activities (generally, this would income generated from investments where you do not participate in the day to day management of the business or activity).Non-taxable combat pay If you received any non-taxable combat pay, the IRS allows you choose whether to figure your EIC with or without this pay included. This calculator will automatically choose the option that produces the highest EIC.Adjusted gross income Your adjusted gross income. This is usually your earned income entered above, plus any interest, dividends or capital gains. If your adjusted gross income is greater than your earned income your Earned Income Credit is calculated with your adjusted gross income and compared to the amount you would have received with your earned income. The lower of these two calculated amounts is your Earned Income Credit.Penal & retirement income Are you (or spouse if married) 19, or 24 or older if a full-time student? Check this box if you or your spouse will be at least 19, or 24 years old or older if a full- time student, at the end of the year. To qualify for the Earned Income Credit, either you or your spouse (if you are married) must be at least 19, or 24 years old if a full- time student, at the end of the year. This rule only applies to people without any children. Your response is not used if you have 1 or more qualified children.Can you (or your spouse if you are married) be claimed as a dependent of someone else? If you have no qualifying children, you can't be the dependent of someone else and receive Earned Income Credit. If you are married, your spouse must also meet this requirement. Generally speaking, you are considered someone's dependent if they provide for more than half of your support during the year.Can you (or spouse if married) be claimed as a qualifying child of someone else? You cannot be a qualifying child of another person and receive Earned Income Credit. If you meet the requirements to be a qualifying child of your parents based on the EIC rules, you are unable to claim any EIC for yourself. This is the case even if your parent or parents do not qualify for EIC and whether or not you have any qualifying children of your own.Have you (and spouse if married) lived in the U.S. for at least six months? Check this box if you (and your spouse if married) lived in the United States for more than six months of the year. You must have lived in the U.S. for at least six months and one day during the current year. This only applies if you do not have any qualified children. For military personnel, you are able to include any time spent on extended deployment as living in the U.S.How do I find my earned income?For your earned income, subtract Line 14 of Schedule 1 (under “Adjustments”) from Line 3 of Schedule 1. Add this number to Form 1040 Line 1 from earlier.
What are examples of earned income?Wages, salaries, and tips; Union strike benefits; Long-term disability benefits received prior to minimum retirement age; Net earnings from self-employment.
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