Tax Information for Low-Income Individuals and Families

• The first $2400 of unemployment benefits will no longer be tax-free as of 2010.
• Earned Income Tax Credit (EITC) is available for all low-income individuals and families.
  To determine whether you qualify, you need to complete Schedule EIC.
• Earned Income Tax Credit requirements for 2010
  • EITC is available for any filing status.
  • You need to have some earned income from employment.
  • You cannot be claimed as a dependent on another person's return. If your income is very low, and you live with another person who has earned income, the IRS may question whether the person living with you has actually supported you all year and should be claiming you as a dependent.
• You must have earned income from employment in order to qualify for the EITC (Earned Income Tax Credit.)
  To claim Earned Income Credit with a dependent child, you must be able to show that over one-half of the child's support is supplied by your earned income. Include all sources of income (plus value of non-cash benefits) when determining whether you have earned enough during the year to claim that you have provided over half of the child's support.
• 2010 Maximum EITC income amounts

  For maximum EITC, earned income level needs to be within the following amounts.

  • No qualifying children: $13,460 to $18,470
  • One child: $35,535 to $40,545
  • Two children: $40.363 to $45,373
  • Three or more children: $43,352 to $48,362
• Child Tax Credit requirements for 2010
  • The maximum credit is $1000 per qualifying child dependent.
  • In order to receive the $1000 Child Tax Credit, you need to be claiming at least one child under the age of 17 (as of December 31st.)
  • Child Tax Credit is available to low and middle-income taxpayers.
  • You can only claim the Child Tax Credit if you owe some federal tax. The Child Tax Credit can only reduce your tax to zero.
• Additional Child Tax Credit requirements for 2010
  The Addition Child Tax Credit is available for those who qualify for the Child Tax Credit, but do not have enough tax liability in order to receive the entire amount. As with the Earned Income Tax Credit, you may qualify for some of the credit even if you have no tax liability at all. It is figured on up to 3 qualifying children. The maximum credit is the same as the Child Tax Credit.
• In 2010, more families will qualify for both EITC and Additional Child Tax Credit
  The income requirement for the Additional Child Tax Credit has been reduce to $3000. The Additional Child Tax Credit available equals 15 percent of the amount of income which exceeds $3000. This means that in 2010 a low-income family with children could likely to receive both the Earned Income Credit and Child Tax Credit (or Additional Child Tax Credit.)