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Tip of the Day Consider Community College or Online College For Your First Year or Two

Consider Community College or Online College For Your First Year or Two - If you are finding you need the education but don't have the funds, or want to take...

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Federal Tax Calculator

"The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low to moderate income working individuals and families," says the IRS. "Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit."

In order to qualify, taxpayers have meet specific requirements and file a tax return, even if they their earnings did not warrant the obligation to file a tax return.

The EITC has no effect on many welfare benefits. Generally, EITC payments are not used in determining eligibility for Medicaid, Supplemental Security Income (SSI), food stamps, low-income housing or most Temporary Assistance for Needy Families (TANF) payments.

To find out if you are eligible for the Earned Income Tax Credit, you can answer some questions and provide basic income information using the EITC Assistant, one of many federal tax calculators, which is available in English and Spanish on the IRS website here: http://www.irs.gov/individuals/article/0,,id=130102,00.html.

Although you do not have to have a child to qualify for EITC, however, you must meet certain rules, listed on irs.gov:

* Must have a valid Social Security Number

* You must have earned income from employment or self-employment

* Your filing status cannot be married, filing separately

* You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien filing a joint return

* You cannot be the qualifying child of another person

* If you do not have a qualifying child, you must:

o be age 25 but under 65 at the end of the year,

o live in the United States for more than half the year, and

o not qualify as a dependent of another person

* Cannot file Form 2555 or 2555-EZ (related to foreign earned income)

* For 2008, your investment income must be $2,950 or less.

Unique rules apply for calculating earned income for members of the U.S. Armed Forces in combat zones, clergy members, hurricane victims, and persons with disability retirement income.

"If you qualify to claim EITC on your federal income tax return, you also may be eligible for a similar credit on your state or local income tax return," The IRS reminds taxpayers. "Twenty-two states, the District of Columbia, New York City, and Montgomery County, Maryland, offer their residents an earned income tax credit."

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Definition of the Day Date of Payment

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