If you have got a low to moderate income and it falls into the tax slab then saving your income becomes a must. But to do it in the right way, you have to get the information regarding the income tax credit. Also known as the earned income tax credit, or EITC, this is a method which helps you to save a substantial amount of income that you earn.If you wish to save yourself from paying exorbitant portion of income then you have to resort to EITC and for that, you will have to fulfill many criteria which are the must-have for this. When it comes to the taxation, then EITC helps a lot in reducing the amount to a significant level and in fact you can also get the refund too. So all in all, there are many things that will really help you a lot in saving the money and making you have a solid bank balance as well. Let us check the requirement that you should meet in order to fall into the 2016 earned income tax credit table:
- You must be employed or have your own business
- You should also meet the rules that are meant for the workers
- There are qualifying child rules as well which you should also meet
What are the qualifying child rules?
There are some child rules which one has to get qualified:
- The classification is based upon many of the levels which is based upon the relationships, residency, age and joint returns as well
- Let us check the ones which are based upon the relationships, grandchild or your own children, or anyone from your brother or sister
- As per the rules related to the residency, the child needs to be live with you in the country
- For the joint return, the child and his spouse should not file for the return unless it is for a refund or for the separate filing requirements
- For age factor as well, you can check out for the age requirements that are stated in the rules that may by 19 or 24
You will be filing either as the:
- Head of the household, widow or as a single earner
- If you are married then you can file jointlyThe investment income limit should be less than $3000 or lesser than this for a single year and the maximum credit amount varies as per the qualifying children you have or don’t have. There needs to be authenticity in the claims being placed otherwise it may lead to cancellation of the facility to the concerned person.
You may also visit the IRS website and get your amount calculated which makes it easier for you to get the right claims placed in the due time.
As per the tax table of the present year that is 2016, you should have a look at the classification of the income based upon the standards here: