Earned income credit is always a credit to low and middle class people in the country. This tax credit is provided by the government to reduce the financial burden of the people mainly the low and middle class people. This motivates people to survive their life happily. This can also be said as the refundable tax credit which varies with the level of income in each family. This also varies with the number of dependants the person have.
Every year certain standards are made to improve the living of the people in the country. There are still debates among the politician that whether it will be good to increase the earned income credit or to increase the minimum wages of the employees.
The person who applies for earned income credit should have a certain valid documents for his proof those are:-
i. Valid social security number
ii. Must be a citizen of the country or should be living there for more than one year and six months.
iii. Age limit of less than 64 years.
iv. Gross income should not cross the limit mentioned by the government.
v. Should not have previously filed under the form 2555 or 2555EZ for the same qualifying year.
vi. If there are any investments, it should be less than $3500 per year.
vii. Must have a qualifying child.
The qualifying person should not be the dependant of another person.
Previously advance payments were given out by the government for the welfare of people. But since 2011 advance payment scheme is cancelled by the government. Another advantage of earned income credit is that the credit which is received through this method is not counted as income when the person is applying for certain other benefits. Even after claiming for the earned income credit one may become eligible for the state or local income credit.
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