TGIF to all of you taxpayers out there!
Today we are continuing our series of daily posts about what’s new in estimated taxes for 2009.
Our topic for today is the Earned Income Credit, or EIC. The Earned Income Tax Credit is a refundable federal income tax credit for low to moderate income working individuals and families. Congress originally approved the tax credit legislation in 1975 in part to offset the burden of social security taxes and to provide an incentive to work. When the EIC exceeds the amount of taxes owed, it results in a tax refund to those who claim and qualify for the credit.
As with all of our posts in this series, the IRS recommend that all quarterly estimated taxpayers review and consider all changes for the 2009 tax year beofre they make any estimated tax payments.
According to the IRS, you may be able to take the EIC if one of the following applies:
- Three or more children lived with you and you earned less than $43,279 ($48,279 if married filing jointly)
- Two children lived with you and you earned less than $40,295 ($45,295 if married filing jointly)
- One child lived with you and you earned less than $35,463 ($40,463 if married filing jointly)
- No children lived with you and you earned less than $13,440 ($18,440 if married filing jointly)
New for 2009 is an increase in the amount of earned income credit for taxpayers with three or more qualifying children.
Also, you can elect to include combat pay as earned income for purposes of claiming the EIC.
Lastly, the maximum investment income you can have and still get the credit has increased to $3,100.
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The IRS e-flie system is now open, most W-2s and 1099s will be in mail in the next couple of weeks. Is everybody ready for tax time?