taxes

Qualifications for earned income credit: Low-income worker loses job, needs a break

Judy O'ConnorDear Tax Talk,
I worked only 10 days in 2015. I paid a federal tax and Social Security tax for that period. Are there any benefits I can get now as I lost my job? I have 2 kids and I have no job now.
-- Fady

Mother reading to her sons, under a blanket fort | Hero Images/Getty Images

Hero Images/Getty Images

Dear Fady,
You need to file a tax return this year to claim any refund due to you from the federal taxes withheld from your paycheck. Additionally, since you have "earned income" from working, you may be qualified to claim the Earned Income Tax Credit, or EITC, which could result in an increased refund to you beyond what you had withheld in taxes.

The EITC is for certain working people who have earned income under $53,267. The amount of the credit varies, depending on the amount of income you have earned from working and the number of qualifying children you do or do not have.

Earned income and AGI limits by filing status for tax year 2015

Number of qualifying children claimedSingle or head of householdMarried, filing jointly
None$14,820$20,330
1$39,131$44,651
2$44,454$49,974
3 or more$47,747$53,267

To claim the EITC, you must also meet these other requirements:

IRS requirements to claim the Earned Income Tax Credit

  • You are required to have a valid Social Security number for you and your qualifying children by the due date of your 2015 return, including extensions.
  • You cannot claim the credit if your filing status is "married filing separately."
  • You must be a U.S. citizen or resident alien all year.
  • You cannot file Form 2555 or Form 2555-EZ relating to foreign earned income.
  • Your investment income must be $3,400 or less.
  • You must have earned income from working.

Source: Internal Revenue Service

In addition, you have to meet the specified requirements if you have a qualifying child or the specified requirements if you do not have a qualifying child. These are listed in IRS Publication 596, Earned Income Credit.

The IRS wants all eligible individuals to claim the credit and they will even figure the credit for you if you need assistance. An online IRS tool, EITC Assistant, can help you determine if you are eligible for the credit. So you may want to start there first.

Thanks for the great question and all the best to you.

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