Earned Income Tax Credit, is known by EITC or EIC is a tax benefit for the people who are working in the United States of America with low income. The taxpayer needs to meet certain criteria to be eligible for EIC since it reduces your tax or may even give you a refund since it is a refundable credit.
As it is called EIC, the taxpayer must work and have earned income and should fall into an age group between 25 to 65 years old.
Since many years we have been helping thousands of taxpayers in dealing with the Audits and Expensive notices from IRS and State Income Tax Departments, because the non-residents are filing form 1040 with the online tax filing websites when they supposed to file form 1040NR. The residents are filing form 1040 with ineligible dependents. We as a tax consulting firm feel the responsibility to create awareness among the taxpayers. Even the taxpayer who is quite knowledgeable will still have a doubt what kind of Deductions & Credits he or she can claim.
We believe that the below information will definitely help taxpayers, who are about to claim EIC or looking for the information on EIC can have a double check before claiming EIC, if still need clarification the taxpayers call very well contact us through www.crescenttaxfiling.com by signing up with us and get many tax services worth $1200 for free of cost throughout the year.
What are the types of earned income?
- Nontaxable combat pay
What are the types of unearned income?
- Social security and railroad retirement benefits
- Child support
- Welfare benefits
- Workers compensation benefits
- Unemployment compensation
- Nontaxable foster care payments?
- Veteran’s benefits
- Rehabilitation benefits
When can I expect my tax refund 2018 with EIC?
If you file your tax returns with Earned Income Tax Credit – EIC or additional Child Tax Credit – ACTC, by USA tax laws IRS can not issue refunds until mid-February.
How to qualify for Earned Income Tax Credit 2018?
In order to qualify for EITC, the taxpayer either should be working for himself or working for someone else, the taxpayer and all his dependents should have valid SSN.
Adjusted Gross Income Table
|Filing Status||Without Qualified Child||One Qualified Child||Two Qualified Children||Three Qualified Children|
|Single & Head of Household-HOH||$15,270||$40,320||$45,802||$49,194|
|Married Filing Jointly – MFJ||$20,950||$46010||$51,492||$54,884|
Below rules & tests are followed if there is a qualified child.
- Joint Tax Return
Relationship Test: The child should be below 18 years of age and should be related to the taxpayer by below conditions
- Daughter, son, stepchild, eligible foster child, adopted a child, or any dependent.
- Sister, Brother, half-brother, half-sister, stepsister, stepbrother, nephew or niece.
- There is no age limit to claim a permanent disability dependent.
What are the types of tax returns to claim Earned Income Credit?
The taxpayer can use form 1040EZ, 1040A, 1040 with Schedule EIC to claim credit, the taxpayer should not be a dependent of someone and should have lived in the USA for more than six months.
Earned Income Credit due diligence penalty 2018
Incorrect Refundable or Non-refundable Credits with Married Filing Jointly, Head of the Household filing or any other filing status, will lead to Audits & Expensive notices from the IRS and State Income Tax Departments.
- The taxpayer must pay back the refund amount with the interest.
- The accuracy penalty will be 20% and maybe with 75% fraud penalty
- Maybe banned claiming credits for 2 years to next 10 years
- Penalties will be applicable to EITC, CTC, AOTC & HOH.
As we see thousands of taxpayers approaching us to help them in dealing with EITC, CTC, AOTC & HOH Audits and Expensive notices from IRS and State Income Tax Departments, after our careful review of the notices we learnt that non-residents who are on F1 are claiming EIC on their tax returns since they are filing form 1040 with online tax filing websites instead of filing form 1040NR. Almost all the online filing website does not provide form 1040NR filing, lack of tax knowledge the non-residents who are on F1 are filing form 1040 instead of form 1040NR.
Crescent Tax Filing is only tax consulting firm in the entire United States providing tax services to residents and non-residents, we file form 1040, 1040A, 1040EZ, 1040NR, 1040X and many more. We can even file form 1040NR electronic filing.
We have simplified our process in such a way that any taxpayer by signing up with us on our website: www.crescenttaxfiling.com, and uploading tax documents can get the accurate tax estimates in just 5 hours with 11 Quality Value Added Tax services worth $1200 for free. Along with the accurate complete tax, estimates client can speak with our tax experts who are CPAs, Enrolled Agents, Chartered Accountants unlimited times for present and previously filed tax returns through the tax returns were filed with different tax consultants. The audit support provided by Crescent Tax Filing Tax Experts who are CPAs & Enrolled Agents is entirely trustworthy and comforting, the tax experts will directly speak with the IRS or State Income Tax Departments tax auditors or tax authorities to see if the authorities are following the right procedure or guidelines, and will try to resolve the tax issues as early as possible.