Tax Guide for Earned Income Credit (EIC) 2013 (Tax Bible Series) [Kindle Edition]

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cover (8)The earned income credit (EIC) is a tax credit for certain people who work and have earned income under $49,078. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EIC may also give you a refund. when they are checking whether they can take the EIC. You are one of those people if any of the following statements are true for 2012.
• You are filing Schedule E (Form 1040).
• You are reporting income from the rental of personal property not used in a trade or business.
• You are reporting income on Form 1040, line 21, from Form 8814 (relating to election to report child’s interest and dividends).
• You are reporting an amount on Form 1040, line 13, that includes an amount from Form 4797.
If none of the statements above apply to you, your tax form instructions have all the information you need to find out if you can claim the EIC and to figure the amount of your EIC. You do not need this publication. But you can read it to find out whether you can take the EIC and to learn more about the EIC.
Do I Have To Have a Child To Qualify For The EIC?
No, you can qualify for the EIC without a qualifying child if you are at least age 25 but under age 65 and your earned income is less than $13,660 ($18,740 if married filing jointly). See chapter 3.
How Do I Figure the Amount of EIC?
If you can claim the EIC, you can either have the IRS figure the amount of your credit, or you can figure it yourself. To figure it yourself, you can complete a worksheet in the instructions for the form you file. To find out how to have the IRS figure it for you, see Can IRS figure for you.
How Can I Quickly Locate Specific Information?
You can use the index to look up specific information. In most cases, index entries will point you to headings, tables, or a worksheet.
Is There Help Online?
Yes. You can use the EITC Assistant at www.irs.gov/eitc to find out if you may be eligible for the credit. The EITC Assistant is available in English and Spanish.
What’s New for 2012
Earned income amount is more. The maximum amount of income you can earn and still get the credit has increased. You may be able to take the credit if:
• You have three or more qualifying children and you earned less than $43,998 ($49,078 if married filing jointly),
• You have two qualifying children and you earned less than $40,964 ($46,044 if married filing jointly),
• You have one qualifying child and you earned less than $36,052 ($41,132 if married filing jointly), or
• You do not have a qualifying child and you earned less than $13,660 ($18,740 if married filing jointly).
Your adjusted gross income also must be less than the amount in the above list that applies to you. For details, see Rules 1 and 15.
Investment income amount is more. The maximum amount of investment income you can have and still get the credit has increased to $3,150. See Rule 6.
Form 8867 as attachment. Starting with the 2012 tax year, if your income tax return is prepared by a paid preparer, Form 8867, Paid Preparer’s Earned Income Credit Checklist, must be attached to your income tax return when you file it. For more information, see Form 8867.
Reminders
Advance earned income credit no longer allowed. You can no longer get advance payments of the credit in your pay during the year as you could in 2010 and earlier years. This is because the law has changed. However, if you are eligible, you will still be able to claim the credit on your return, as explained in this publication.
Increased EIC on certain joint returns. A married person filing a joint return may get more EIC than someone with the same income but a different filing status. As a result, the EIC table has different columns for married persons filing jointly than for everyone else. When you look up your EIC in the EIC Table, be sure to use the correct column for your filing status and the number of children you have.