2008 Earned Income Tax Credit

The Earned Income Credit (EIC) is a tax credit for certain people who work and have earned income below a specific amount. This credit may give you a refund even if you do not owe any tax. In order to claim this credit, you must file an income tax return and qualify by meeting certain rules.

A CREDIT CAN BE AS MUCH AS: 

• $438 for earned income or adjusted gross income (AGI) less than $12,880 and no children $15,880 if married filing jointly)
• $2,917 for earned income or AGI less than $33,995 and one qualifying child ($36,995 if married filing jointly)
• $4,824 for earned income or AGI less than $38,646 and more than one qualifying child $41,646 if married filing jointly)

• AGI must be less than the above mentioned limits
• You must have a valid social security number
• Your filing status cannot be married filing separately
• You must be a U.S. citizen or resident alien all year
• You cannot file Form 2555 or Form 2555-EZ (relating to foreign income)
• Your investment income must be $2,950 or less
• You must have earned income

• Your child must meet the relationship, age and residency tests
• Your qualifying child cannot be used by more than one person to claim the EIC
• You cannot be a qualifying child of another person

• You must be at least age 25, but under age 65
• You cannot be the dependent of another person
• You cannot be a qualifying child of another person
• You must have lived in the United States for more than half the year

QUALIFYING CHILD: 

A qualifying child is a child who is:

• Your son, daughter, adopted child (placed for legal adoption), stepchild or a descendant of any of them (for example, your grandchild) or
• Your brother, sister, stepbrother, stepsister or a descendant of any of them (for example, your niece or nephew), who you cared for as your own child or
• Your foster child (any child placed with you by an authorized placement agency or by judgment, decree, or other order of any court).
• And the child was, at the end of the current tax year, under age 19 or under age 24 and a student or permanently and totally disabled at any time during the year, regardless of age
• And the child lived with you in the United States for more than half of the tax year.

• Wages, salaries and tips
• Gross income received as a statutory employee
• Taxable long-term disability benefits received before minimum retirement age Net earnings from self-employment
• Nontaxable combat pay election. You can elect to include nontaxable combat pay in earned income for the purpose of figuring the earned income credit.

Liberty Tax professionals are available for your tax needs. Please call your local Liberty Tax office for further information.