- EITC is the "big kahuna" of refundable tax credits!
- Difference between living above and below poverty line for single parent of two kids earning minimum wage!
- NYS has a "piggyback" EITC which adds 30% of the federal EITC to the state tax refund!
- A lot of money at stake for vulnerable taxpayers
- Errors are common-- Key to getting it right:
- Correct number of Qualifying Children (QC)
- QC for dependent exemption NOT exactly same as QC for EITC
- Support test for QC:
Yes for QC dependent exemption but No for EITC
- Residence test for QC:
Usually for QC dependency exemption but ALWAYS for EITC
- Accurate figures for Earned Income and Unearned Income
- (Graph above does not apply if income is not entirely earned!)
- "Earned Income" is wages plus self-employment income