The 2015, 2016 earned income credit and EIC calculator

The US Federal Earned Income Tax Credit (EITC) was introduced in 1975, it is offered to individuals and couples on low and medium incomes as a refundable tax credit.

It is targeted at those with children and may give you a sizable refund. Originally this was for only two dependents, but since 2012, it has temporarily been increased to three or more dependents.

If you have three or more children you can claim a maximum tax credit of $6,044 with an adjusted gross income of less than $48,362 if you are married and filing jointly.

Eligibility requirements for the EITC

If you are a citizen of the US, over the age of 25, have qualifying children, do not file married filing separately, and have made an income from employment you may qualify for this credit.

However, keep in mind money received from unemployment is not valid for this credit. Additionally, you can also have interest, dividends and other earnings from investments, as long as they do not exceed $3,350.

Children must qualify to be eligible for this credit by meeting these three tests:

Relationship

Your child must be any of the following: Brother, sister, half brother, half sister, stepbrother, stepsister, son, daughter, stepchild, foster child or dependent.

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Age

Your child must be one of the following: Be aged under 19 and younger than you; be a full time student under 24 and younger than you; be permanently and totally disabled during the year.

Shared residence

Your child needs to have lived with you for more than half a year in the United States.

Income limits of the EITC

Your AGI has to be lower than:

  • $46,997 ($52,427 for married couples) with three of more children
  • $43,756 ($49,186 for married couples) with two children
  • $38,511 ($43,941 for married couples) with one child
  • $14,590 ($20,020 for married couples) with no children

Credit Amounts for 2014

Your income and children determine the amount of the credit that you receive.

  • $6,143 with three or more children
  • $5,460 with two children
  • $3,305 with one child
  • $496 with no child

What children qualify?

In order for a child to qualify, they must meet the age, relationship, residency, and joint return tests.

  • Age: The child must be under 19, or under 24 if they are a student. However, if they are permanently disabled there are no age requirements in place.
  • Relationship: The child has to be your child legally, or your sibling or your siblings offspring.
  • Residency: The child must have resided with you in the country for more than six months.
  • Joint Return: Your child cannot have filed a joint return. If they did, it had to have been because they wanted a tax refund and not because they were required by the IRS to file.

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