About Earned Income Tax Credit
Frequently Asked Questions
- What is the Earned Income Tax Credit (EITC)?
- How much money is the EITC worth?
- Who can get the EITC?
- Does my child or another child I'm raising count for me to get the EITC?
- What if my child doesn't live with me all the time? Can I still count that child to get the EITC?
- If I am not raising children, can I get the EITC?
- How do I get the EITC?
- I am married. Do I have to file "jointly" to get the EITC?
- Are there any asset limits for the EITC?
- Do I have to be a U.S. Citizen to get the EITC?
- Does if matter how long I have lived in Hawai'i to get the EITC?
- How long will it take to get my federal tax refund?
- Where do I go to get an application?
- If I don't file my taxes will I get the EITC?
- Why should I file my taxes if do not have to?
- What if was supposed to get the EITC last year or the year before but I didn't?
- Where can I go to get my taxes done (file my taxes)?
- How much does it cost to file my taxes?
- What should I bring to get my taxes done?
- Do I have to go in person to get my taxes done?
- What is "Instant Money," "Money Now" or a "Refund Anticipation Loan"?
- Is there a way to estimate how much money I will get from the EITC?
- Will getting money from the Earned Income Tax Credit (EITC) affect my eligibility for other programs?
- Can I get my EITC refund during the year instead of waiting until tax season?
- What counts as "earned income" for the EITC?
- What are the income limits for the EITC?
What is the Earned Income Tax Credit (EITC)?
The Earned Income Tax Credit is a federal tax credit that helps low-income people who are working, especially those who are raising children. If you get it, you will either get a larger refund (money given back to you) or pay less in federal taxes.
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How much money is the EITC worth?
Most people who get the EITC get a refund. The largest refund you can get from the EITC during tax season 2009 is:
Note: Investment income must be $2,950 or less for the year. Other credits which you may qualify for: Child Tax Credit, Additional Child Tax Credit, Child and Dependent Care Credit, and the Economic Stimulus Payment if you did not receive one in 2008. |
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Who can get the EITC?
The EITC is mostly for working parents (or others such as grandparents, relatives or foster parents) who are raising one or more children. Parents have to be at least 25 years old and under 65 years old to get the EITC. There are also rules about which children count for the EITC. Some people who are not raising children, but who work can also get the EITC. Your income from work has to be below the limits to get the EITC. Lots of people who can get the EITC do not get it, because they do not file their taxes. They miss out on money that is meant for them.
Earned Income and adjusted gross income (AIG) must be less than:
$38,646 ($41,646 married filing jointly) with two or more qualifying children
$33,995 ($36,995 married filing jointly) with one qualifying child $12,880 ($15,880 married filing jointly) with no qualifying children |
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Does my child or another child I'm raising count for me to get the EITC?
Children who count for you to get the EITC are called "qualifying children." To be a qualifying child, a child has to be: A son, daughter, adopted child, foster child placed by an agency, grandchild, stepchild, brother, sister, stepbrother, stepsister (or a descendent of any of these), and who lived in your home for at least six months during 2005. Under age 19, or under age 24 if a full-time student. (Totally and permanently disabled children can be counted at any age.)
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What if my child doesn't live with me all the time? Can I still count that child to get the EITC?
A child has to live with you at least 6 months of the year to count for the EITC. If a child's parents do not live together, only one of them can count (or claim) a child for the EITC. If a child lives with you half of the year and another parent or person half of the year, there is a "tie-breaker rule" that says who can claim the child. This rule says that if more than one person can claim a child, but only one of them is the child's parent, then the parent gets to decide who can claim the child. If both parents lived with the child for the same amount of time (six months each), then the parent with the highest income decides who can claim the child. If children spent part of every week with one parent, and the other part with the other parent, you should count up the number of days the child spent with each parent.
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If I am not raising children, can I get the EITC?
Single adults or couples who are not raising children, but who are working can also get a smaller EITC. It is worth up to $438 in tax season 2009. The income limits to get the EITC are much lower for people who are not raising children.
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How do I get the EITC?
You can only get the EITC if you file your taxes (or have someone file them for you). If you pay someone to do your taxes, it will probably cost you $120 or more. There are also free tax preparation sites throughout Hawai`i. Trained, professional volunteers at these sites will prepare your taxes at no cost to you. To find a free tax site near you, click here, or call 2-1-1.
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I am married. Do I have to file "jointly" to get the EITC?
Yes. Married couples cannot get the EITC if they file separately.
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Are there any asset limits for the EITC?
Yes. If you have more than $2,800 in investment income, you cannot get the EITC. Other assets such as money in a checking or savings account or other items you own do not matter for the EITC.
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Do I have to be a U.S. Citizen to get the EITC?
No. Legal immigrants can also get the EITC, but you have to have a Social Security Number (valid for work) for yourself, your spouse (if you have one) and your qualifying children to get it.
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Does if matter how long I have lived in Hawai`i to get the EITC?
You can get the EITC even if you lived in a different state for all or part of 2008. But, if you did not live in the United States for all of 2008, you cannot get the EITC.
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How long will it take to get my federal tax refund?
You can usually get your federal refund within 5-10 days of filing if you have a bank account and use direct deposit. If you don't have a bank account, it will probably take 4-6 weeks to get your refund in a check.
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Where do I go to get an application?
There is no application, because the EITC is not a program. To get the EITC, you have to file your taxes.
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If I don't file my taxes will I get the EITC?
No.
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Why should I file my taxes if do not have to?
Because many Hawai`i residents with low incomes can get money back at tax time. If you do not file your taxes, you could miss out on lots of money. Plus, you can get your taxes done for free at many places in Hawai`i. To find a free location, click here, or call 2-1-1.
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What if was supposed to get the EITC last year or the year before but I didn't?
You can still get the EITC for up to three years before this tax year if you didn't get it, but were supposed to get it. This is called "back-filing." Your tax preparer can help you back-file if you need to.
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Where can I go to get my taxes done (file my taxes)?
To find a list of free tax preparation sites throughout the state of Hawai`i, click here or call 2-1-1.
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How much does it cost to file my taxes?
If you pay someone to do your taxes, it will probably cost you at least $120, and it could cost much more. If you go to a free tax preparation site, you will not have to pay anything.
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What should I bring to get my taxes done?
2009 Volunteer Income Tax Assistance Document Checklist
- Taxpayers must bring the following documents to any free tax assistance site. If they do not bring these items with them, their returns may not be able to be completed and filed.
· Valid Photo ID (Driver’s License, State ID, Military ID, Passport, Student ID) Other Documents to Bring If They Pertain to the Taxpayer: IN SHORT, PLEASE BRING ALL DOCUMENTS THAT HAVE TO DO WITH ANY MONEY THAT THE TAXPAYER RECEIVED OR PAID OUT DURING THE YEAR. |
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Do I have to go in person to get my taxes done?
Yes. If you are married and filing jointly, you and your spouse need to go to get your taxes done.
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What is "Instant Money," "Money Now" or a "Refund Anticipation Loan"?
These are all names for loans that paid tax preparers offer their customers. If you get one of these loans, you can usually get your refund quicker, but these loans are very expensive. Usually the annual percentage rate (APR) is over 200%! That means you will lose a large part of your refund money if you take out one of these loans. If your refund is delayed for any reason, you will pay even more money for this loan. We recommend that you don't take out a loan like this. If you can wait a couple weeks after you file, you will get all of the money that you are supposed to get.
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Is there a way to estimate how much money I will get from the EITC?
Yes. The National Community Tax Coalition has a website that will estimate how much money you could get from the EITC. (This is a guess, not a guarantee of how much money you will get.) Click here to go to their website.
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Will getting money from the Earned Income Tax Credit (EITC) affect my eligibility for other programs?
The EITC is never counted as income for government programs. But some government programs have asset tests that limit how much money or property families can have (such in a money in a checking or savings account) and still be eligible. For most programs, the money from the Earned Income Tax Credit (EITC) is NOT counted as an asset during the month it was received and the following month. After that, the money could affect your eligibility for programs that have asset limits.
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Can I get my EITC refund during the year instead of waiting until tax season?
If you received the EITC last year, you can get some of next year's EITC money in each paycheck, instead of waiting until your refund at tax time. Ask your employer for a W-5 form so that you can file for the "Advanced EITC" (or AEITC). You can return the form to your employer at any time of the year and start getting a portion of your credit in each paycheck.For more information, click here to go the IRS site.
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What counts as "earned income" for the EITC?
These types of income count as earned income for the EITC: Wages, salaries, self-employment earnings, tips, union strike benefits, and long-term disability benefits (if received before retirement). If you have nontaxable combat pay, you can decide if you want to count it as earned income. These types of income do not count as earned income for the EITC: MFIP, MSA, or GA benefits, worker's compensation, unemployment insurance benefits, alimony, child support, interest and dividends, Social Security and railroad retirement benefits, pensions and annuities, variable housing allowances for the military, and earnings for work done while in jail or prison.
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What are the income limits for the EITC?
To get the EITC, all of your earned income (income from working) has to be below these limits.
INCOME REQUIREMENTS - TAX YEAR 2008:
Earned Income and adjusted gross income (AIG) must be less than: $38,646 ($41,646 married filing jointly) with two or more qualifying children $33,995 ($36,995 married filing jointly) with one qualifying child $12,880 ($15,880 married filing jointly) with no qualifying children Investment income must be $2,950 or less for the year. The maximum Advance Earned Income Tax Credit (advance EITC) for TY 2008 the employer is allowed to provide throughout the year with the employee's pay is $1,750. |
