by Laura Sullivanlyndall

Created on: January 17, 2011

Earned income credit is a tax credit that is designed and aimed at helping the low income working population. In addition, it gives the low income an incentive to continue working rather than collecting welfare. Anyone who meets the tests and requirements may claim the credit as long as their filing status is not married filing separate.

To claim the credit you must first have a valid social security number for yourself and anyone you are claiming as a spouse or dependent on your tax return. The next requirement to claim the credit is that you must have earned income. This means must have earned wages from a job, from self employment, or as a statutory employee. In addition, you must not have more than $3,100 of investment income for the claiming year.

If you meet the previous requirements then there are additional requirements or tests to be met depending on your particular situation and filing status.

The first test is the age test.

Qualifying taxpayers must be 25 years of age or older to get the credit, with the following exceptions. If they are claiming qualifying children, in which case the qualifying children must be younger than the taxpayer. The exception to this rule of children be younger  is that the qualifying dependent must be totally and permanently disable to qualify. For example, a 24 year old taxpayer could qualify for earned income credit by claiming their totally and permanently disabled older sibling for which they care for and support. Another age test for children is they must be 19 or younger unless they are a student any part of 5 months of the corresponding tax year, with the exception to the disabled qualification. As long as they are a student any part of 5 months of the tax year, they may be claimed for earned income credit purposes up to the age of 25. They must still meet all other test requirements.

The second test is the relationship test.                                                                               

Each qualifying child must be the taxpayer(s)

Son.daughter, stepchild, foster child, grandchild, brother, sister, half

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