Can some one educate me on Earned Income Credit?
In the late 90’s, when I was uber poor, I know the break point was (+ / -) $14,500. At $14,500 you got the maximum in EIC. Below that you got less. Above that you got less. One year I was scrambling to find more income because I was just short of it. I’d get refunds of $3000 or $4000.
However, something seems to have changed drastically. I can’t find the break point for 2014. I’m filing taxes (Turbo Tax) for a friend with 3 dependent children. This year she made about $10,000. Her refund is only $1162 from federal and $65 from state.
Another friend of mine who, between he and his wife, made about $35,000, 3 dependent kids, is getting back $8,000 on Federal, $700 on state.
I don’t want to submit the return for my friend until I am comfortable with the fact that is is correct. So does that sound right?
Observing members:
0
Composing members:
0
6 Answers
From IRS.gov:
EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
2014 Tax Year
Earned Income and adjusted gross income (AGI) must each be less than:
$46,997 ($52,427 married filing jointly) with three or more qualifying children
$43,756 ($49,186 married filing jointly) with two qualifying children
$38,511 ($43,941 married filing jointly) with one qualifying child
$14,590 ($20,020 married filing jointly) with no qualifying children
Access the information for:
2015 Tax Year
2013 Tax Year
2012 Tax Year
2011 Tax Year
Return to EITC Home Page
Tax Year 2014 Maximum Credit:
$6,143 with three or more qualifying children
$5,460 with two qualifying children
$3,305 with one qualifying child
$496 with no qualifying children
Investment income must be $3,350 or less for the year.
For more information on whether a child qualifies you for EITC, see Qualifying Child Rules or Publication 596, Rules If You Have a Qualifying Child.
So it would appear that your friend with 3 children making less than 10,000 will be eligible for the maximum credit.
I’m not familiar with TurboTax, but I’m guessing you need to answer the questions for the qualifying children and do the due diligence part of the EIC form. The refund should be a lot higher.
That’s what I’m thinking. I have answered all the questions, though. When I go to the review it lists her kids as dependents.
Just for the heck of it I deleted one of her dependents and it didn’t change the refund at all. (I re-entered her, of course.)
I GOT IT!!! Her refund will be a few dollars shy of $6,000. What I do not understand is why I had to go back through and through, 10 times, before I finally, almost accidentally, landed where I needed to be.
Answer this question 
Composing members:
0
