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Earned Income Credit will Offset the Impact of Social Security Taxes on Low to Moderate Income Taxpayers

Earned Income Credit is good news for all the low to moderate income taxpayers. It is a tax return instead of a tax deduction. The Earned Income Credit can be worth up to $6,557 for 2019 and up to $6,660 for 2020. But a person must clear the criteria for earned income credit qualification to qualify for EIC.

The person must file for EIC as a single or married. A married person cannot file separately from their partner. One must have earned Income for employment or self-employment.

If the person earns over a certain sum amount, then they aren’t eligible for the EIC. For 2019 this amount is $3,600; for 2020, the amount is $3,650. Anyone who files for form 2555 for foreign-earned income or form 2555-EZ for foreign income exclusion is not eligible for EIC.

People with children will have a different maximum credit amount. $6,660 will be the limit for people with three or more qualifying children, $5,920 will be the limit for people with two qualifying children, $3,584 will be the limit for people with one qualifying child and $538 is for people with no qualifying children.

The person who claims for the child, must be directly related to the child or have a legal relationship with the child. A person who wants to avail the EIC, must file a federal income tax return. They must also file Schedule EIC and include it with their federal return.

The person who registers for the EIC must have Social Security information/verification for any persons claimed on the return, the date of births of the persons mentioned, copies of their prior year’s federal and state returns.

The rest of the details are available on the IRS website. If a person wants to avail the tax returns, then they can fill up the worksheet and check if they are eligible.

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