The Earned Income Tax Credit allows taxpayers who have low to moderate incomes to pay fewer taxes and keep more of their pay. If the tax credit to which you’re entitled is more than the tax you owe on your earnings, you’ll get a tax refund. Married couples with or without children may qualify for the Earned Income Tax Credit if their Adjusted Gross Income falls below the threshold set by the IRS. You don’t need a special tax form to claim Earned Income Credit if you qualify; simply complete a form 1040 or 1040EZ.
Married Without Children
If you are married and you don’t have any qualifying children, your adjusted gross income can’t be more than $18,740, as of 2012. In addition, you must file as “married filing jointly,” your income from investments can’t be more than $3,150, and you must have at least some earned income – that is, income from wages or salary. You can’t be claimed as a dependent on someone else’s tax return and you must be at least 25 years old and no more than 65 years old. Also, you must have lived in the United States for more than half of the year.
The IRS considers a qualifying child to be a child who lives with you for more than half the year, whom you support. This could be your biological child, adopted child or step-child, but it could also be your brother or sister, niece or nephew, grandchild or foster child. The child must be younger than 19, or younger than 24 and a full-time student, or the child may be any age and permanently and totally disabled. A qualifying child may only be claimed by one person so, for example, if you share custody with an ex-spouse, you can’t both claim a child as a qualifying child.
Married With Children
Married couples with children may qualify for the Earned Income Tax Credit if their Adjusted Gross Income falls below these levels, as of 2012: with three or more qualifying children -- $49,078; two qualifying children -- $46,044; one qualifying child -- $41,132. You must have a valid Social Security number for each child you claim.
Your Earned Income Tax Credit is based on money you earn from self-employment or from salary and wages. Money from Social Security, investments, unemployment benefits, child support or alimony doesn’t count as earned income, though the IRS may set limits. For instance, if you earn more than $3,150 in interest and dividends, you may not be entitled to Earned Income Tax Credit.
Cynthia Myers is the author of numerous novels and her nonfiction work has appeared in publications ranging from "Historic Traveler" to "Texas Highways" to "Medical Practice Management." She has a degree in economics from Sam Houston State University.