What Is a Qualifying Individual for the Earned Income Credit?

The Earned Income Credit (EIC) is one of the Internal Revenue Service's refundable credits. Refundable credits, unlike nonrefundable credits, can reduce a taxpayer's tax below zero (meaning you can get a refund of more tax than you paid in or than was withheld from your return). For this reason, a refundable credit can yield a larger refund than nonrefundable credits.

Qualifying Person

• For the 2009 tax year, you may be eligible to claim EIC if you are over age 25 and under 65, cannot be claimed as the dependent of another person, are not a qualifying child of another taxpayer, have lived in the U.S. for more than half a year and have earned income of less than $13,440 ( $18,440 if married filing jointly).

Qualifying Child

• You qualify for the greatest EIC refund if you have a qualifying child. A qualifying child does not need to be a biological or adopted child. A qualifying child could also be a brother, sister, stepchild, half-brother or sister, a foster child or a descendent of one of these individuals. To meet the tax law requirements for a qualifying child, the child must be under age 19 at the end of the tax year (or under age 24 if the child is a student), must have lived with you for more than half the year and must not have filed a joint return. To qualify for EIC if you have a qualifying child (children), the annual income limits are $35,463 ($40,463 for married filing jointly) with one child; $40,295 ($45,295 for married filing jointly) with two children and $43,279 ($48,279 for married filing jointly) with three or more children.

Exceptions

• To qualify for EIC on your own, you cannot be a qualifying child of another person. In addition, you can't file for the EIC if your filing status is married filing separately, you did not meet the income requirements, you did not have any earned income, you are not a citizen or resident alien of the United States or you earned in excess of $3,100 in investment income.

Assistance

• You can get help in determining if you are a qualifying person or qualifying child by calling the IRS at (800) 829-1040 between the hours of 7am and 10pm. If you prefer, you can also visit one of their many walk-in offices.

Warning

• If your EIC was disallowed for any year after 1996, then you are required to file IRS Form 8862 with your income tax return. In addition, if your EIC disallowance was due to recklessness, then you are disallowed from claiming the benefit for two additional years. If your disallowance was due to fraud, then you are forbidden to claim it for 10 years. Fraud is considered knowingly claiming a dependent who you are not eligible to claim and recklessness constitutes claiming EIC because you did not do due diligence.