The IRS Earned Income Tax Credit (EITC) is available to certain lower income working individuals and families. The amount available for EITC increases with the size of your family. For 2011 tax returns, families can claim a maximum of $ 5,751 with three or more qualifying children.
EITC is a refundable credit, meaning that not only does is reduce your tax liability down to zero, but any overage will be paid to you in way of a refund.
In order to qualify for EITC, you must have earned income from employment, self-employment or another source. You have to have a valid Social Security number and you cannot file your taxes as married, filing separately.
- Child Credit
- If you are a parent with children living at home, you may be able to take advantage of a child tax credit. For each child, you can reduce your tax liability by up to $1,000 (as of January 2011). With this particular credit, the children must be under the age of 17 to qualify. You can also get a credit if you pay for child care.
If You Work, You Can Get These Tax Credits and Not Lose Other Public Benefits – EIC and CTC refunds won’t count as income when you apply for or renew benefits like food stamps (now called SNAP), SSI, Medicaid, cash assistance, or public housing. Refunds that are saved do not count against these and other federally-funded benefit program resource/asset limits for 12 months after the refund is received.
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