Preparing Your Tax Return(s) and Information Returns

Earned Income Credit (EIC)

The Earned Income Tax Credit (EITC), sometimes called the Earned Income Credit (EIC), is a refundable Federal income tax credit for low-income working individuals and families with earned income under certain limits.

The EITC Eligibility Checklist in Publication 596, Earned Income Credit, may be used to quickly determine eligibility for the credit.

Some employees with at least one child living with them may be entitled to receive advance EITC payments in their paychecks. The employee must file Form W-5, Earned Income Credit Advance Payment Certificate, with an employer to receive the advance payments. The employer then pays part of the credit to the employee in advance throughout the year. The taxpayer claims the rest when filing a Federal tax return.

Important References: 

Publication 596         Earned Income Credit (EIC)
Schedule EIC            Earned Income Credit (Form 1040A or 1040)
Publication 15           (Circular E), Employer's Tax Guide
Publication 3107      Earned Income Tax Credit - A Toolkit For Tax Professionals
Form W-5                  Earned Income Credit Advance Payment Certificate

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Earned Income Tax Credit (EITC)