Earned Income Credit

[pennypinch]

You know I was just sitting here wondering if we will be able to claim the third child again this year on the Earned Income Credit on the 2010 income tax returns? Anyone know?

Last year was the first time that they allwed this. It used to be that only two children counted, even if you had fifteen kids! (I don't thank goodness rofl!) But I do have three and it was nice for them all to actually count!

Taxes can be so confusing!

It is time to begin gathering up all of the paperwork though. At least the things that you already have.

I hate waiting until the last minute. I'd rather be a little prepared at least lol.

Well if you have any idea about the earned income let me know. Thanks!

[moneysense]

According to HRBlock, the Earned Income will include three children again this year. And yes, that does make it so much nicer that you can claim all 3.

For more information, check this out. HRBlock

[2cents]

Sorry to be such a newbie--can you explain what the Earned Income Credit is? I have three kids, too, and would love to know!

[pennypinch]

I know what you mean 2cents. Taxes are really confusing!

I cannot put into words what exactly the Earned Income Credit is so here is the IRS's definition and some Q&A's...

Q1. What is the Earned Income Tax Credit (EITC)?

A1. The earned income credit (EITC) is a tax credit for certain people who work and have low wages. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EITC may also give you a refund.

Q2. Who can claim the credit?

A2. To claim the EITC on your tax return, you must meet all of the following rules:

• Must have a valid Social Security Number
• You must have earned income from employment or from self-employment.
• Your filing status cannot be married, filing separately.
• You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
• You cannot be a qualifying child of another person.
• If you do not have a qualifying child, you must:
  • be age 25 but under 65 at the end of the year,
  • live in the United States for more than half the year, and
  • not qualify as a dependent of another person
• Cannot file Form 2555 or 2555-EZ (related to foreign earn income)
• You must meet these EITC Income limits,maximum credit amounts and tax law updates

I hope that clears it up for up for you. You can get the actual income amounts and so on to see whether you will qualify at IRS