Tax Resources
 
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Which Tax Credits Can I Claim?

Before filing taxes, you should have the details of your income and dependents or anyone you are supporting because you may be eligible for some tax credits. Tax credits can either lower your tax liability or put money directly into your pocket. Below are some common tax credits that you should evaluate to see if you qualify for any of them. Note that tax credits are not the same as tax deductions which reduce your taxable income.

Do I qualify for earned income credit or EIC?

In order to claim the Earned income credit or EIC, your earned income and the AGI must be less than (in 2007):

$33,241 ($35,241 if married filing jointly) with one qualifying child
$37,783 ($39,783 if married filing jointly) with two or more qualifying children
$12,590 ($14,590 if married filing jointly) without a qualifying child

Also see the requirements for earned income tax credits for the following tests:

  • Valid social security
  • Not married filing separately
  • US Citizen or resident alien ALL year
  • investment income of less than $2,900
  • have earned income
  • not fling Form 2555 or 2555-EZ (foreign income)

If there is a qualifying child, the children must:

  • not be qualifying child of another
  • meet relationship, age and residency test
  • valid social security number
  • not used by another to claim EIC

If there is no qualifying child, the taxpayer (also spouse if married filing jointly) must:

  • be at least 25 but under 65 (both spouses need not qualify)
  • not be dependent of another
  • not be qualifying child of another
  • live in the US for more than half a year


Do I qualify for child and dependent care credit?

If the taxpayer pays someone to care for a dependent who is under 13 or for a disabled spouse or dependent, a child and dependent care credit may be allowed. The taxpayer must meet all tests below:

  • care must be for 1 or more qualifying persons (must qualify)
  • qualifying person must live with taxpayer (and spouse if MFJ) for more than half a year
  • taxpayer (and spouse if MFJ) must have earned income (special rule for full time student or disabled spouse)
  • expenses must be work related
  • payments must be made to someone who cannot be claimed as a dependent (if child then child cannot be dependent and must be 19 or older by year end)
  • filing status cannot be married filing separately
  • identify careprovider on return

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