If you earn less than $23,050 a year, and have a child living with you for at least half of the year, you may be eligible to receive more than $2,000 in special tax credits from the Internal Revenue Service.
A new booklet from the IRS, "Don't Short-change Your Family," (item 516A, free) explains the Earned Income Credit (EIC). To get your free copy, send your name and address to the Consumer Information Center, Department 516A, Pueblo, Colo., 81009.EIC is a special tax credit offered to low-income workers with children. The basic credit is worth up to $1,434 for one child, or as much as $1,511 for two or more. If you pay health insurance premiums for at least one child, you may get an additional $465. And if you have a child born in 1993, you may get another $388. The amount you qualify for is subtracted from the amount of taxes you owe. If your EIC is more than your taxes, you may get the remainder of the money back.
To qualify for an EIC, the child living with you for at least half the year must be yours by birth or adoption, be a grandchild, stepchild or your foster child. The child must be under age 19, or under 24 and a full-time student. Permanently and totally disabled children qualify regardless of age.
If someone claims you as their child for the purpose of receiving an EIC, you cannot claim this credit on your return, even if you'd otherwise qualify.
Also exempt from claiming an EIC are married couples filing separately and those filing Forms 2555 or 2555-EZ for foriegn-earned income. And two people filing separately on tax returns cannot claim the same child for an EIC. Only the person with the highest adjusted gross income may claim the credit.
You can claim the EIC all at once at the end of the year or in your paychecks throughout the year. To claim the EIA all at once, you can file the 1040 or 1040A forms, available after the end of the year from the IRS. Look for the forms that have a Schedule EIC section. To get your EIC credit all year in your paycheck, you can get an Advance Earned Income Credit (AEIC). Just file form W-5, Earned Income Credit Advance Payment Certificate, with your employer. You'll then receive part of the basic credit in each paycheck.
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Holiday safety
Here are few tips to help you have a safe and happy holiday.
- Keep mistletoe and poinsettias out of a child's or pet's reach.
- Inspect your holiday lights and make sure they are UL labeled.
- Make sure your artificial trees and greenery are flame retardant. Keep candles away from flammable decorations.
- Avoid overloading circuits or extension cords; turn off all decorative lights before you go to bed.