The Earned Income Credit (EIC) is for certain people who work. The credit may give the taxpayer a refund even if the taxpayer does not owe any tax, see Qualifications below.

 Tip. TaxBrain calculates EIC automatically based on the filing status, qualifying dependents and Adjusted Gross Income (AGI).  If the taxpayer qualifies, Schedule EIC will be automatically included with the return.

TaxBrain Advantage
Because TaxBrain automatically determines if the taxpayer qualifies, there is no need to worry about completing the IRS worksheets and risking the possibility of erroneously claiming EIC.

If the taxpayer was to take the EIC even though the taxpayer is not eligible and it is determined that the error is due to reckless or intentional disregard of the EIC rules, the taxpayer will not be allowed to take the credit for 2 years even if the taxpayer is otherwise eligible to do so. If the taxpayer fraudulently takes the EIC, the taxpayer will not be allowed to take the credit for 10 years. The taxpayer may also have to pay penalties.

Qualifications
Based on IRS specification, if the taxpayer meets any of the following conditions, the taxpayer cannot claim the EIC:

• The taxpayer's Earned Income doesn't meet IRS specification.
• The taxpayer's filing status is married filing separately.
• The taxpayer's Investment Income is more than $2,650.
• The taxpayer, or spouse if filing a joint return, are a Qualifying Individual of another person in 2005.
• If the taxpayer does not have a qualifying dependent and:
  • The taxpayer (or spouse if filing a joint return) can be claimed as a dependent on someone else’s 2005 tax return.
  • The taxpayer (or spouse if filing a joint return) aren't at least age 25 but under age 65 at the end of 2005.
  • The taxpayer's home (and spouse’s if filing a joint return) is in the United States for more than half of 2005. Members of the military stationed outside the United States:
    • If the taxpayer was on extended active duty outside the United States, the home is considered to be in the United States during that duty period. Extended active duty is military duty ordered for an indefinite period or for a period of more than 90 days. Once the taxpayer begins serving extended active duty, the taxpayer is considered to be on extended active duty even if the taxpayer serves fewer than 90 days.
• The taxpayer cannot get the EIC if, instead of an SSN, the taxpayer (or spouse, if filing a joint return) has an individual taxpayer identification number (ITIN). ITINs are issued by the Internal Revenue Service to non citizens who cannot get an SSN.