What does EIC stand for?


Quick Answer

EIC stands for Earned Income Credit, a tax credit for low- to moderate-income individuals and couples that may reduce the amount of taxes owed or even provide a tax refund. This credit is also called EITC, or Earned Income Tax Credit.

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Full Answer

To receive EIC, individuals or couples must file a Schedule EIC with their tax returns and have a Social Security Number that's valid for employment in the U.S. The income counted must come from working for a wage or from operating a business or farm. This credit is available to U.S. citizens, resident aliens who have lived in the country the entire year and non-resident aliens married to a U.S. citizen or resident aliens who file a joint return with their spouses.

If married couples file separately, they cannot receive this credit. Individuals who are a qualifying child of another taxpayer also aren't eligible for EIC. If taxpayers file Form 2555 or Form 2555 EZ, which are related to foreign income, they cannot claim this tax credit.

In order to qualify for EIC, individuals and couples must meet income requirements and have a qualifying child. If taxpayers do not have a qualifying child, they must still meet income requirements and be between the ages of 25 and 65 at year's end, not qualify as a dependent of someone else and live in the U.S. for at least half the year.

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