EIC Table 2011

Working folks who earn a low to moderate income can apply for the Earned Income Tax Credit (EITC) or simply, EIC.

In 1975, Congress passed the EIC legislation in efforts to encourage people to work and to reduce the burden of Social Security taxes. In the event that the EIC is higher than the amount of due taxes, qualifying people can claim a tax refund. Many people have benefited from the EIC because it can be quite a significant amount.

To qualify for EIC, you need to fulfill the following requirements:

• You must be a citizen of the United States.
• Your filing status must be head of household, married and filing jointly, single, and qualifying widow. You may not file separately if you are married.
• You must have earned income.
• Qualifying children must be below the age of 18 or they have to be full-time students.
• All members of the household must possess valid Social Security numbers.
• You cannot be a qualifying child on another individual’s tax return.
• You should not have investment income which is greater than $3,100.

Upon discovering that you have fulfilled all the qualifying requirements, you can then calculate the amount of EIC you are eligible to claim. Some people prefer to use an online tax calculator for this purpose. Two important factors which determine your EIC are your level of income and the size of your family. The EIC can be used to reduce the amount of taxes owed and it can also be used as a tax refund. Let’s take a look at the EIC Table for 2010 and 2011.

The summary of the EIC Table is provided for Head of Household, Qualifying Widow, and Single.

3 or More Children

For people with earned income of $1 to $12,549, the EIC is calculated by multiplying the earned income by 45 percent. If your income falls between $12,550 and $16,449, the EIC is a standard amount of $5,666. The EIC begins to phase-out for people whose income is between $16,450 and $43,349. The calculation is a little complicated. Firstly, you subtract $16,450 from your earned income. Then, multiply the amount by 21 percent. Finally, you subtract this final amount from $5,666 and you will find your EIC. For people who make more than $43,350, the EIC is zero.

2 Children

For people with earned income of $1 to $12,549, the EIC is calculated by multiplying the earned income by 40 percent. At the point where earned income is between $12,550 and $16,449, the EIC is a standard amount of $5,036. If your earned income falls between $16,450 and $40,362, your EIC is between $5,031 and $1. People who make more than $40,363 are not eligible for EIC.

1 Child

For people with earned income of $1 to $8,949, the EIC is calculated by multiplying the earned income by 34 percent. The EIC is a standard amount of $3,050 for people who earn $8,959 to $16,449. If your earned income falls between $16,450 and $35,534, the EIC is between $3,046 and $1. There’s no EIC for people who earn more than $35,535.