근로소득자를 위한 보조금(Earned Income Credit)

EARNED INCOME CREDIT

Earned Income Credit 은 저소득 서민들을 위한 정부 보조금으로 특히 자녀를 가진 서민들 에게는 가장 큰 도음이 되는 중요한 Credit 이다.  Credit 금액이 근로소득의 크기와 자녀의 수에 따라 다르지만 자녀가 세명일때  2016년 경우 maximum $6,269  이될 정도로 금액이 크고 세금이 없어도 받을수 있는 Refundable Credit 이다.  Credit 산출 방법이 복잡하고 조건이 까다롭기 때문에 전문가의 도움이  필요하다.

Earned income and adjusted gross income (AGI) must each be less than:

Investment Income Limit

Investment income must be $3,400 or less for the year.

Maximum Credit Amounts

The maximum amount of credit for Tax Year 2016 is:

• $6,269 with three or more qualifying children
• $5,572 with two qualifying children
• $3,373 with one qualifying child
• $506 with no qualifying children

The United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- and medium-income individuals and couples, primarily for those who have qualifying children. When the credit exceeds the amount of taxes owed, it results in a tax refund to those who claim the credit. For a person or couple to claim one or more persons as their qualifying child(ren), the relationship, age, and shared residency requirements must be met, as well as some other requirements. U.S. tax forms 1040EZ, 1040A, or 1040 can be used to claim EIC without qualifying children. To claim the credit with qualifying children, 1040A or 1040 must be used along with Schedule EIC attached.

EIC phases in slowly, has a medium-length plateau, and then phases out more slowly than it phased in. And since the credit phases out at 21% (more than one qualifying child) or 16% (one qualifying child), it is always preferable to have one more dollar of actual salary or wages (although technically, since the EIC table moves by fifty dollar increments, it’s always preferable to have an extra fifty-dollar increment of salary or wages).

A younger single parent cannot claim EIC if he or she is also claimable as a qualifying child of their parent or another older relative, which can happen in some extended family situations. This restriction does not apply to a married couple who are claiming EIC with a child, even if one or both spouses are under the age of 19. A person claiming EIC must be older than his or her qualifying child unless the “child” is classified as “permanently and totally disabled” for the tax year (physician states one year or more). A qualifying “child” can be up to and including age 18. A qualifying “child” who is a full-time student (one long semester or equivalent) can be up to and including age 23. And a person classified as “permanently and totally disabled” (one year or more) can be any age and count as one’s qualifying “child” provided the other requirements are met. qualifying child can be a person’s daughter, son, stepchild, or any further descendant (such as grandchild, great grandchild, etc.) or a person’s brother, sister, half sister, half brother, stepbrother, stepsister, or any further descendant (such as niece, nephew, great-nephew, great-great-niece, etc.). A qualifying child can also be in the process of being adopted provided he or she has been lawfully placed, as well as an unrelated foster child who has been officially placed.

What is  Earned income?

Earned income is defined by the United States Internal Revenue Code as income received through personal effort, with the following as the main sources:

• Wages, salaries, tips, commissions, and other taxable employee pay.
• Net earnings from self-employment.
• Gross income received as a statutory employee.
• Disability payments through a private employer’s disability plan received prior to minimum retirement age (62 in 2011).
• Nontaxable combat pay received by a member of the U.S. armed services which he or she elects to include for purposes of EIC calculation. This is an all-or-none election. For each tax year, the service member must elect to include either all of the combat pay or none of it.

Qualifying children

A person or couple claiming EIC with one or more qualifying children need to fill out and attach Schedule EIC to their 1040 or 1040A. This form asks for the child(ren)’s name, social security number, year of birth, whether an older “child” age 19 to 23 was classified as a student for the year (full-time status for at least one long semester or equivalent time period), whether an older “child” is classified as disabled during the year (doctor states one year on more), the child’s relationship to claimant, and the number of months the child lived with the claimant in the United States.