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Do you qualify for these 2017 EITC Tax Credits?

Posted on February 7, 2018


The EITC is a federal income tax credit for workers who earn $53,930 or less for 2017 and meet other eligibility requirements (listed below). Because it’s a refundable credit, those who qualify and claim the credit could pay less federal tax, pay no tax or even get a tax refund.

Tax credits generally mean more money in taxpayers’ pockets, “But that’s only if the new credits are claimed,” says Barry Sapurstein, CPA with Teipen Selanders Poynter & Ayres. “And, the rules are a little complicated.”

To qualify for EITC, taxpayers must have earned income and file their income taxes. Here’s what to know and how to claim it, from TSPA CPAs:

The amount of EITC taxpayers receive is based on their income, family size and filing status. The maximum amount of credit for Tax Year 2017 is:

·  $6,318 with three or more qualifying children

·  $5,616 with two qualifying children

·  $3,400 with one qualifying child

·  $510 with no qualifying children

The average household income in many small towns and rural areas is below the national average. Because of this, many of these taxpayers may qualify for EITC. Here are some things that people living in rural areas should know:

·      To get the credit, taxpayers must file a tax return, even if they don’t owe any tax.

·      Because it’s a refundable tax credit, those who qualify and claim the credit could pay less federal tax, or pay no tax, or even receive a tax refund.

·      Eligible taxpayers must have earned income from employment or owning a business (or farm) and meet basic rules.

·      Single workers without a qualifying child who earn less than $15,010 may qualify for a smaller amount of the credit.

·      Special rules apply for those in the military.

The IRS says that taxpayers with disabilities qualify for the EITC, too, provided they file a tax return. In fact, the EITC could put a refund of up to $6,318 into an eligible taxpayer’s pocket.

People with disabilities are often concerned that a tax refund will impact their eligibility for one or more public benefits, including Social Security disability, Medicaid, and SNAP — the Supplemental Nutrition Assistance Program. The law is clear that tax refunds, including refunds from tax credits such as the EITC, are not counted as income for purposes of determining eligibility for such benefits. This applies to any federal program and any state or local program financed with federal funds.

Members of the military and veterans may qualify for EITC if they have earned income less than $53,930, with these exclusions:

·      Generally, nontaxable pay such as combat pay, housing allowance and subsistence allowance for members of the armed forces isn’t categorized as earned income.

·      A member of the armed forces can elect to have all nontaxable combat pay included in earned income for purposes of the EITC. Doing so may increase or decrease their EITC. These taxpayers should calculate their taxes both ways to find out what’s best for them.

·      Couples with two members of the military filing a joint return have a few options when deciding whether to include combat pay in their income. Ask your tax professional for specifics.

·      Members of the military on extended active duty outside the U.S. are considered to live in the country during that duty period for purposes of figuring their EITC.

The best way to get your EITC questions answered – or file your claim? Talk to a qualified tax professional or CPA, like those at Teipen Selanders Poynter & Ayres. They can help you wade through the particulars, and help you file electronically, meaning you’ll get a quicker tax refund.