Get $4800 With The Earned Income Tax Credit
You could qualify for a maximum tax credit of $4,800 if you made less than $42,000 in 2008. Even if your salary was around $61,000 but you lost your job last year, you could still qualify. It's called the "Earned Income Tax Credit" and you can find out if you can claim it by taking the IRS' online EITC quiz. Your tax preparer, be they human or software, can you help determine if you're worthy (One big one: you must be over 25 but under 65 at the end of the year).
Free money from the IRS? [Consumer Reports Money Blog]
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the maximum is $4,824 for taxpayers with 2 qualifying children making between $12,050 and $15,750. those of us without offspring are limited to a maximum credit of $438 for earned income between $5,700 and $7,200. either way, it's a refundable credit, which means you get it even if you have no tax liability.
You better be older than 25, but younger than 65, or no money for you!
So said the IRS quiz, which is why I don't qualify.
It told me my earned income had to be under $38,000, filing jointly. So about $19,000 single... I spend more than half that on daycare in 1 year.
The key to the EITC is that up to a certain point, the more money you're taxed on, the more tax credit you'll get. So, if, for example, you're a waitress and you're thinking about how much of your actual tips amount to declare, you would probably be better off declaring all of it instead of the mandatory minimum. You'll probably end up getting a nice check from the IRS instead of actually having to pay taxes.
@emona: I wonder when they are going to stop the age discrimination... I know if it said "if your skin color is darker than hispanic, you don't qualify" that wouldn't fly, so why in the world should I not be getting any tax credit just because I'm 20? I'm an adult, I've been paying (a LOT) in taxes in the past 4 years which I have been employed full time, but because I'm not of the age where my insurance is cheaper (arguably making me more needing of the tax credit) I don't get to have it. F**K you Obama.
Ah damn I'm 23.
This article should be amended to not get people's hopes up. After filling out their questionaire, I was told that my income needed to be $12,880 to qualify.
A far cry from $42,000.
@emona: Yeah, the age discrimination is ridiculous. I've joked with my friends, "Yes, it's because we all make so much more money at 23 than at 25."
@tsume: I wouldn't go so far as to say "F**K you Obama". In reality, this has been the rule for a number of years, and this is the first tax season since his inauguration. That said, I hope he acts to change this pointless rule.
Also disqualified, by the 3k interest income cutoff...bummer. Penalize those who save money, nice, real nice.
where did you get this 42,000 number? to get the EITC you have to have made less an 12,880. Thats a long way from 42,000.
I don't really get where you guys are getting this $42,000 figure from. I made ~$38,000 gross last year and it says I don't qualify because my earned income needs to be less than $12,880.
the ~$42,000 figure is from the EIC table - if you make between $41,600 and $41,646, are married filing jointly and have 2 children, you're eligible for a $5 credit. no children? ineligible over $12,880.
@undefined: Umm, I don't know if it's because I don't have any kids and I'm single, but that 42 grand figure isn't accurate. I went through the calculator and it told me that I wasn't eligible because:
* The total of your earned income amount must be less than $12,880 for 2008
* The total of your adjusted gross income amount must be less than $12,880 for 2008
12,880 a year? Isn't that poverty level for 1 person??
Fuck. Well at least I can claim this *next* year, once I'm 25.
.... and that is why I waited until I was 26 to have that second kid.
Once again I get screwed for "making too much money." I'm also single and male so I always get screwed when it comes to tax rebates.
@tsume: You missed the subsection where potty-mouths are excluded as well, so you'd have twice lost the credit. :(
@Roxanne: I *think* it was part of the welfare reform back in the Newt Gingrich days. The idea was to give back something to working families as an incentive to get boost their income to something humans could actually live off of, as a counterbalance to the Ending Welfare As We Know It provisions that set lifetime caps that were there previously.
Probably, since it was aimed at people entering the workforce, they wanted to exclude high school/college kids doing the summer-job thing, and those eligible for social security, who are already getting benefits.
@DeeKey: If you're making >$3,000 in interest, you've got a pretty decent nest-egg, assuming Bernie Madoff isn't your financial advisor. What makes you think it's fair that someone in that situation should get a benefit designed to lift the working poor's income to a liveable wage?
@tsume: Um, do you mean car insurance? Because I can guarantee you, that is about the only form of insurance that actually gets cheaper once you turn 25. My options for health insurance pretty much doubled in cost once I turned 25.
Also, regardless of age if you don't have kids you pretty much have to live in absolute poverty to get this credit (and if you do, you still have to be pretty damn poor). If you have no kids and work full time it's pretty much impossible that you'd qualify for this credit, regardless of your age.
single females don't get anything special with taxes either :)
@Justin Barbieri:
Me too, got this:
Based on the information you provided, you are not eligible to claim the Earned Income Tax Credit because...
* The total of your earned income amount must be less than $12,880 for 2008
* The total of your adjusted gross income amount must be less than $12,880 for 2008
@emona: damn turning 25 a month later! I need new gutters and windows. It's going to be a hot summer and a cold winter this year.
@Trai_Dep: Who says I am not the working poor just because I dont live paycheck to paycheck?
I saved that money over a period of 15 years. That is over 3k in interest FOR A YEAR, you would only need 100k in a "decent" MMA or CD to get that kind of interest, does that sound like I am rich to you? If I said it was my entire retirement, does that still sound like alot?
People SHOULD have that kind of cushion for bad economic times. Because they always follow the good ones.
I find it hard to feel sorry for the laid-off auto workers who were making 60k a year (I never made that much) and are now in dire straights because they didnt save a dime of that income. One story of a guy making that 60k said that within 2 weeks of getting laid-off he couldnt pay his bills? WHAT?
It's a bit misleading. Those numbers are for people with two or more children:
Tax Year 2008
Earned income and adjusted gross income (AGI) must each 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.
Tax Year 2008 maximum credit:
*
$4,824 with two or more qualifying children;
*
$2,917 with one qualifying child;
*
$438 with no qualifying children.
I do understand why the age limit excludes teenagers, as the majority of teenagers who pay taxes make little enough that they would qualify, and as far as I can tell this credit is intended to help impoverished people, not just anyone who has little income but may otherwise be supported by someone else with adequate income.
It is kind of weird to me, though, that ALL people under 25 or over 65 are also disqualified, as many aren't being supported by anyone else and are genuinely living at very low income levels with other family members to support. I suppose the majority of workers are between age 25 and age 65, but I don't know why workers outside that age group who may also have dependents are still automatically disqualified. The mysteries of the tax system...
@IT-Chick:
I am over 25 and under 65 - and made about 33,280 last year. It told me I wasn't eligible because:
"The total of your earned income amount must be less than $12,880 for 2008
The total of your adjusted gross income amount must be less than $12,880 for 2008"
So I'm not sure who qualifies "if you made less than 42,000 in 2008."
~_~
Very misleading, thanks for wasting my time -_-
@DeeKey: Considering the $100k would have to be in a non-retirement account, it's a lot more than most Americans have squirreled away outside of a 401k.
As with anything, the system has to draw some lines somewhere. I didn't even get the tax rebate/incentive/whatever last year even though I was unemployed at the time.
I don't feel very sorry for the folks who make good money who don't understand savings, but it seems to be the American way of life.
@battra92: Yes, so screwed. How about you trade salaries with the guy making 13k so you can get a couple thousand in credits?
When your tax refund will probably be higher than a month of their pay, you're not screwed.
Yes, unfortunately a great headline but no dice for me.
I read that info and I am both under 25 and an immigrant without citizenship, so no dice!
Yeah this article is pretty misleading. I was going to be pissed over the over 25 argument since I was independent and worked full time last year (I'm 23) but since I'm not married with two kids, my income doesn't qualify anyway.
You guys should at least offer the cliff's notes of the rules before you get us all clamoring to get a big tax refund.
This sucks.
I pay (a fair bit) of taxes, and I want my EIC.
Let's figure out how to (really) EECB the White House.
Guys, they obviously got the $42,000 number from the article they linked to. And if you read it, that number only applies to people with two kids.
Does that mean 25 to 65 at the end of LAST year, or THIS year?
Never mind, I took the survey, and realized it was the end of 2008. Dammit, my 25th was in the first month of 09!
in related news i have that sticker from an the LP package
@DeeKey: If you have ~$100K cash sitting around, and don't have a decent IRA or 401K amount (depends on your age, talk to an accountant/advisor), you need to reallocate. You're losing much to taxes that you shouldn't be. :)
If you DO have over $200 large in protected and naked funds, do you really think this wouldn't exclude you from the working poor? Really, honestly?
Free money from the IRS? Well, for most it's not free, it's just being returned. But for some, it is free. You're welcome.
The whole CR title has be boggled. It feeds the entitlement mentality. Would you say of a mugger that took your wallet, but left you a fiver: "He gave me five bucks".