Taxpayer asks:
I was told that if I make more than 46,000.00, my family didn’t qualify for the EIC. My wife saw on the news this morning that if you make less then 71,000.00 that we should qualify. I’m married with two children, one born in 2009. Which is correct?
Thanks
Taxgirl says:
Hmm. As far as I am aware, you are correct.
If you qualify for EITC, your AGI for 2009 must be less than:
- $43,279 ($48,279 for married filing jointly) if you have three or more qualifying children;
- $40,295 ($45,295 for married filing jointly) if you have two qualifying children,
- $35,463 ($40,463 for married filing jointly) if you have one qualifying child, or
- $13,440 ($18,440 for married filing jointly) if you do not have a qualifying child.
So, married and two kids puts you at less than $45,295.
Additionally, your income must largely come from wages, salary, self-employment, or other earned income; you can only have up to $3,100 in investment income for the year 2009 to qualify.
Eligibility also depends on a few other criteria including:
- a valid Social Security Number;
- a filing status other than married filing separately;
- US citizenship or residency for the entire year(or a nonresident alien filing a joint return with a US citizen or resident alien);
- not a qualifying child of another person; and
- no form 2555 or 2555-EZ.
In addition, if you do not have a qualifying child, you must be between ages 25 and 65, live in the US for more than half the year, and not qualify as a dependent of another person.
With all of that in mind, I’ve racked my brain and Googled until I can Google no more and I can’t figure out where that $71,000 figure comes from. Perhaps it could be state-related? I played around on some of the state sites (you can find a list of states that offer a form of EITC here) and didn’t see any numbers nearly that high.
My guess is that something on the report ran together, possibly related to another credit. But it’s definitely not the earned income credit. Maybe one of my tax colleagues have an idea?
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
While it is unlikely, If the news story was about same-sex couples, then they may qualify if their earned income is around $71,000. Because same-sex couples are forced to file their federal tax returns seperately, even in states where a same-sex marriage or unions are recognized, their earned income phase limits and phase outs are effectively higher. A couple with 2 kids could earn a combined income of up to $70,926 (2 x the single limit) and still qualify for EITC. Plus, each spouse could get the credit for one child, which is higher than a married couple’s credit for two children.
While I think that kind of news story was unlikely, it does seem like the news station just got their facts wrong and doubled the income limits for singles rather than looking up the married limits on earned income.