Who can claim the Earned Income Credit (EITC) ?

2014 Tax Year

Earned Income and adjusted gross income (AGI) must each be less than:

   $46,997 ($52,427 married filing jointly) with three or more qualifying children
    $43,756 ($49,186 married filing jointly) with two qualifying children
    $38,511 ($43,941 married filing jointly) with one qualifying child
    $14,590 ($20,020 married filing jointly) with no qualifying children




Definition of "Qualifying Child":
A qualifying child is your:
 - Son
 - Daughter
 - Adopted child
 - Grandchild
 - Stepchild
 - Eligible foster child (see below)
 - Brother, sister, stepbrother,
  stepsister, niece, or nephew

At the end of the year a qualifying child must be:
 - Under age 19, or
 - Under age 24 and a full-time student, or
 - Any age and permanently and totally disabled

Also, the child must have:
 - Lived with you in the U.S. for more than
  6 months during the year, or
 - Died during the year but lived with you in the U.S.
  while alive during the tax year in question

- A qualifying child must be younger than the person claiming the child.
- A qualifying child must have a social security number unless he was born and died during the tax year.
-- A qualifying child must not be married and filing a joint tax return, unless the joint tax return is filed for the sole purpose of requesting a refund.

- A person is permanently and totally disabled if -
(1) he or she cannot engage in any substantial gainful activity because of a physical or mental condition, AND
(2) a doctor

Please notice that a "qualifying child" DOES NOT have to be your dependent. 
       
Tax Year 2014 Maximum Credit:
    $6,143 with three or more qualifying children
    $5,460 with two qualifying children
    $3,305 with one qualifying child
    $496 with no qualifying children

Important wrinkle in the EITC workup: Investment (portfolio and passive) income must be $3,350 or less for the year or you don't qualify..

If you meet this income eligibility you should go to go to the Internal Revenue Service Web site at www. Irs.gov  or contact your tax advisor to see if you meet the other federal criteria. Maryland taxpayers who meet all of the federal requirements may be eligible for a Maryland credit up to half of the federal EITC but not greater than the state income tax. Additionally, certain employees also may qualify for a refundable Maryland credit, or a local EITC.

If you need a tax advisor, consider TaxHelpWhenYouNeedIt.com, located in Silver Spring, Maryland.  We can meet with you in a private, confidential setting and spend as much time as needed to get it right as you make your income tax filings. And we're here for you throughout the year if you later have questions or problems.  Our phone number is 301-537-5365