This year, when completing your tax return, take a closer look at the deductions and credits you qualify for. With the troubled state of the economy, many people may find themselves in a different tax scenario than years past – which could mean a bigger check from the government!

A perfect example of this is the Earned Income Tax Credit (EITC), a tax credit created to help those who do work, but only make a modest income.  The federal government considers this credit “refundable,” which means you can get a refund check even if you don’t have tax liability.

The biggest problem with the EITC is that many who qualify don’t take advantage of it. But applying for the credit is simple – it just requires filling out a tax return at the end of the year.

Use the chart we’ve put together (using the IRS Income Limits) to see if you qualify.

Basic EITC Qualifications: (For the full list of qualifications visit IRS.gov)

-          Valid Social Security Number
-          Have earned income from employment, self-employment or another source
-          Not using the “married, filing separate” filing status
-          U.S. citizen or resident alien all year
-          Cannot be the qualifying child of another person
-          Adjusted Gross Income and earned income must meet the Income Limits
-          Investment income must be less than the Income Limits

Income Qualifications:

*The income limit applies to your Adjusted Gross Income and Earned Income – each MUST be less than the income limit.

You can also check out the IRS’ EITC Assistant tool here.

Also, be sure to see if you qualify for similar deductions on the state level. Some states also have an EITC credits – see if you qualify!

Check back next week for more Tax Tips!

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