The first tax credit that you may qualify for is the Earned Income Credit. If you have one or more children you will need to (1) have earned some kind of income within the tax year, (2) have earned $34,458 ($35,458 if married and filing jointly) or less if you have more than one child, or $30,338 ($31,338 for married couple) if you have one child, (3) you cannot be filing as married filing separately, (4) neither you or your spouse can be a qualifying child of someone else, (5) only one person can claim each child, (6) you can’t be also filing a Form 2555, Foreign Earned Income, or IRS Form 2555-EZ, Foreign Earned Income Exclusion, (7) you have to be a U.S. citizen or a residential alien, (8) have investment income less than $2,650 for the year, and (9) you, your spouse, and each qualifying child must have a valid social security number in order to qualify for the Earned Income Credit.
If you don’t have a qualifying child you can still qualify for the Earned Income Credit as long as: (1) your income is less than $11,490, (2) you have earned income to report, (3) you are not filing as married filing separately, (4) you are not the qualifying child of another person, (5) you are between the ages of 25 and 65 at the end of the tax year, (6) you are not another person’s dependent, (7) you lived in the United States at least 50% of the tax year (see exception note), (8) you are not filing a form 2555 or a Form 2555-EZ, (9) you are a U.S. resident or resident alien, (10) you have investment income that is less than $2,650, and (11) you must have a valid social security number.
(Exception note for #7 above – Military personnel that are on active duty and stationed overseas are still considered to have lived in the U.S. during the year and therefore satisfy the EIC qualification requirement #7.).
The EIC credit can help you get a larger tax return when you file by giving a tax credit between $2 and $4,300 depending on your annual income and the number of children that you have, or you can file form W-5 with your employer and get an Advance Earned Income Credit added to your monthly payroll check. To qualify for AEIC you have to (1) expect to qualify for EIC at the end of the tax year, (2) file form W-5 with only one employer, (3) have a qualifying child, and (4) you must meet all of the requirements set out in the W-5 form instructions. Once you qualified you will receive a portion of your annual EIC added to your paycheck (not taxable and not considered income). The amount added to each paycheck will be based on a formula, which takes into consideration how much money you earned during the pay period and your filing status.