More than ever before, grandparents are raising their grandchildren. The IRS wants working grandparents to know they may qualify for for the Earned Income Tax Credit, and to claim it if they qualify. But, before going into too much detail about determining if you qualify for the EITC, let’s first explain what it is, shall we?
What is the Earned Income Tax Credit?
The EITC is a federal tax credit for workers whose income is below a certain level. For 2016, that level is $53, 505 or less. Basically, it is a refundable credit which means people who qualify for it could pay less federal tax, pay no federal tax, or even get a federal tax refund. According to the IRS, the EITC could put anywhere between an extra $2 to an extra $6269 back into a taxpayer’s pocket.
Who Qualifies for the EITC?
Aside from meeting income requirements, there are other requirements taxpayers need to meet in order to qualify for the credit. The basic rules for qualifying for this tax credit include having a social security number, having income, and you must file your tax returns in one of the following ways:
- Married filing jointly
- Head of household
- Qualified widow or widower
There are some additional rules for qualifying for the credit. Check out the IRS website for additional details.
Grandparents can Claim the EITC
So, as I said earlier, grandparents are caring for more and more children in the United States. They are often unaware of being eligible to claim the credit on their tax returns. A grandparent who is working and who has a qualifying child living in the household may be able to claim the credit even if the grandparent is 65 or older. Special rules apply if the child’s parents also qualify for the EITC