Friday, February 12, 2010

Keep More of the Money You Earned

The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are important federal tax benefits for low-to-moderate income workers. The programs can either lower the amount of taxes you owe the government, or in some cases provide a cash refund, even if you did not make enough money to file a tax return.

According to national estimates, however, as many as 25 percent of eligible workers do not claim EIC benefits. That is money you earned leaving your pocketbook.

In order to get EITC or CTC benefits you must file a federal tax return, and meet these requirements:

· You Must Have Earned Income
Whether you were self-employed or worked for someone else, you must have earned income during 2009.

· Your Adjusted Gross Income (AGI) Must Meet Certain Limits
For example, a married couple filing jointly with one qualifying child must have an AGI under $40,463 to qualify for the credit.

· You Must Have a Valid Social Security Number
You, your spouse (if filing jointly) and any/all qualifying children must have a Social Security Number.

· Your Filing Status Cannot be "Married Filing Separately"

· You Must Be a U.S. Citizen or Resident Alien All Year

· You Cannot Have Foreign Earned Income

· Your Investment Income Must be $3,100 or Less for the Year

Federal stimulus money expanded EITC and CTC money this year for larger families with three or more qualifying children.