If you received this notice, the IRS is notifying you that you have been re-certified for the Earned Income Tax Credit (EITC). The EITC is a benefit for taxpayers who work and have low to moderate income. This credit reduces the amount of taxes you owe and may also result in you receiving a refund. In order to qualify for this credit and continue to receive it you must meet all of the following requirements:
– You, your spouse (if you file jointly), and all others you list on Schedule EIC must have a valid Social Security number.
– You must have earned money from working for a third party, or from running or operating a business or farm.
– If you are married, you may not file separately.
– You must be a U.S. citizen or a resident alien for the entire prior tax year, or a nonresident alien who is married to a U.S. citizen or resident alien.
– You may not be a qualifying child of another taxpayer.
– You may not file Form 2555 (or Form 2555EZ) related to your foreign earned income.
– You must meet the earned income allowance, AGI, and investment and income limits for each year in which you would like to participate in the EITC program.
– You must also meet one of the following: have a qualifying child, OR be between 25 and 65 at the end of the year, live in the U.S. for more than half of the prior year, and not qualify as another person’s dependent.
Earned income is considered all taxable income and wages you received from working for someone else or your own business. This also includes wages, salaries, tips, any union strike benefits you received, net earnings from self-employment, and some disability benefits you received before reaching the minimum retirement age.
Your child is considered a qualifying child if they meet all of the following:
– Age: Must be under 19 at the end of the year and younger than you or your spouse, if you file jointly.
– Relationship: They must be your son, daughter, stepchild, eligible foster child, or descendant of any of these (grandchild), or your brother, sister, half sibling, stepsibling, or any descendant of these (niece or nephew).
– Residency: The child must have lived with you or your spouse if you file jointly, for more than half of the year.
– Joint return: Your child must not have filed a joint return, or if they did, they/their spouse did so only to receive a refund and were not required to file.
If you have any questions about the EITC and whether or not you qualify, the IRS offers an EITC Assistant application in both English and Spanish.
If you have received this notice, you do not have to fill out the Form 8862, Information to Claim Earned Income Credit After Disallowance. In fact, you do not need to do anything else! Just keep this notice for your records and be on the lookout for your refund which should arrive in about 6 weeks. If you have not received your refund after 6 weeks, call the number listed at the top of your notice.
Please keep in mind the information and advice presented in this blog is not intended to be used as formal legal advice. Contact a tax professional for personalized tax advice pertaining to your specific situation. While we try and answer all parts of the question when we write our blogs, sometimes there may be some left unanswered. If you have any questions about your problems with the IRS, SBOE, FTB, or BOE, or tax law in general, call RJS Law at (619) 595-1655.
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