When it comes to financial situation, no one can judge yours better than you can. For that reason, we bring you an amazing DIY self-analysis tool to see whether you qualify or not. However, before you start using the EIC calculator on our website, we want you to take some time and educate yourself a little more about the EIC, its benefits and its criteria. Remember, the educated decision is also the best decision with promising long term impacts on your current and future finances. So, here are the basics you need to know.
Introduced in 2009, EIC or EIC is an income tax benefit for people who are raising children but their income is very low and insufficient. The amount IRS describes at low-income changes every year according to the changing inflation rate and other economic factors. EIC is actually a refundable tax credit. Typically, a qualified individual receives a hefty sum as a refund on the taxes that have been paid. In some cases, however, the qualified person receives a tax cut instead of a refund. In either case, EIC lends a strong support to your financial situation.
The good thing about EIC is that you won’t have to wait too long. For people who have a bank account, the refund is received within 5 to 10 days. However, those with no bank account will have to wait for around four weeks. Another advantage of EIC is that the amount is not counted as an income and therefore does not affect your eligibility for most of the other IRS programs.
EIC is meant for working parents or guardians with income lower than the limit specified by the IRS. For last year, the income limit was $3,200. The qualifying child must be under the age of 19, or 24 in case of a full-time non-earning student. Disabled children can qualify regardless of age. Another qualifying criterion specifies that the applicant must not have filed for any kind joint return.
So, what if you have a very low income but have no child? You can still qualify for EIC but the limit for the income is much lower than the limit for those who are raising children. Lastly, but most importantly, you do not qualify if you haven’t filed for your income taxes. So make sure you have filed for your taxes before applying for Earned Income Tax Credit Return.
And before doing that prepare yourself with a proper plan by calculating your estimated refund amount using the EIC calculator.