The earned income tax credit came into existence in the year 1975
. It was mainly used to combat trends that had lead to poverty rate reductions and boosting the income of the poor. It also aimed at helping the welfare recipient making the transition back to work. This credit is available to employees who meet certain eligibility criteria.
Earned credit is a part of refundable credit that is available to you if you are a low income worker and meet the criteria. Earned income tax credit is a form of credit and it cannot be counted under income. This credit is then deducted from the incomes for filing the tax return every year.
Even if you dont own any tax on your tax return to the IRS or you have no tax withheld then you can still try to obtain credit. Some people may get money back because this credit is a refundable credit. It is important to note here that if you try to fraudulent claim your tax credit then you earned income credit will be disallowed for a period of ten years.
You need an intelligent helper which will be able to solve all your problems and provide you with reliable calculations. The advancement in modern technology has made the introduction of income tax calculators. Efficiency and speed are two most noticeable attributes of online tax calculators. Besides learning tax calculation is not as difficult as it seems.
All across the internet you will find people selling tax software. These range from simple income tax software to highly complex auditing software. These software not only helps in tax calculation, they are also very beneficial in IRS. Of course, they cannot do 100% of the things all by themselves but yes they reduce your burden up to 99%.
This software just requires an auditor. These software offer a perfect alternative to manual computing. Hiring an accountant not only costs you more money but it is also prone to error. Thus, it is always recommended that you use tax software for calculation of tax.
The income limitations eligibility for earned income credits depend upon marital status, family size as well as income. This credit can be for part time, full time and for single or married people. In some cases childless workers can also claim this credit.
Earned income credit is not an income but it does offers lot of benefit to us.