United States taxpayers aged 25 or older can receive hundreds of dollars back on their tax return with the Earned Income Tax Credit (EITC). Since the U.S. government designed the earned income credit to provide an incentive to lower income workers, Internal Revenue Service (IRS) guidelines set income and investment earning limits to prevent high income earners from claiming the credit.
According to the IRS, parents can earn a maximum credit of $457 without children, $3,050 with one child, $5,036 with two children and $5,666 with three or more child dependents when claiming the Earned Income Tax Credit for the 2010 tax year. The earned income credit is refundable, meaning that the claimant can receive money back after filing his return even if he doesn’t owe tax.
Regardless of income, U.S. taxpayers must have legal status or citizenship in the United States and must live in the country for at least half the year according to Disability Benefits 101. Claimants must be at least 25 years of age during the claimed tax year and no older than 64 years of age to claim the credit without children. Taxpayers with children can claim the credit regardless of their age, although they cannot be the dependent of another taxpayer.
According to the IRS, taxpayers with no dependent children cannot earn an earned income credit if they make more than $13,460, while those with one child cannot make more than $35,534.99 for the 2010 tax year. To qualify, single persons with two children can earn up to $40,363, and those with three or more children can make up $43,352 in salary in wages for the year.
Married couples have higher EITC income limits than single parents. Married couples with no children can receive a credit if they make less than $18,470, while those with one child can make up to $40,545 in the 2010 tax year. To qualify, parents with two or more children can make up to $45,373, and those with three or more children can earn up to $48,362. Couples who are married but filing separately do not qualify for the earned income credit regardless of their income.
For the 2010 tax year, U.S. taxpayers must earn less than $3,100 a year from investment income in order to qualify for the earned income credit. Investment income, also known as unearned income by the IRS, include profits from buying and selling stock or bonds and receiving dividends or interest income.
Chris Hamilton has been a writer since 2005, specializing in business and legal topics. He contributes to various websites and holds a Bachelor of Science in biology from Virginia Tech.