Are You Receiving the Proper Tax Credit?

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All taxpayers should be aware of the Earned Income Tax Credit (EIC). What is it? It's a refundable tax credit that lightens taxes paid by those with low income. It's vital to make sure you're getting it exactly as it should be because it helps you keep what you've earned. 
 
How do you make sure you're receiving the proper credit? 

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Make Sure You Qualify: In order to qualify for The Earned Income Tax Credit, you have to meet certain criteria: a valid SSN, earned income, joint filing if you're married, U.S. citizenship, meeting minimum credit amount laws, have a child OR not qualify as a dependent for anyone, and being between the ages of 25 and 65. There are also other qualifying standards and criteria you can review.

Know What Qualifies As Earned Income: When it comes to determining what your earned income is, you can count salary, tips, taxable compensation, self-employment earnings, disability earnings, employer-furnished meals and lodging, military pay, strike pay and statutory wages. 
 
Figure Out Your Credit: So once you know if you quality, how do you figure out what your earned income tax credit should be? You can do one of two things. You can let the IRS figure it out for you, or you can figure out the credit for yourself by using the Earned Income Credit Worksheet, available in the instructions for Forms 1040, 1040A or 1040EZ. It is available in both English and Spanish.
 
Sort Out The Error: You may have been denied EIC in the past by the IRS. If this was because of some kind of reckless and/or intentional disregard of the rules, then you can't file for two years. If the error was due to outright fraud, you can't claim for ten years. If you are eligible to re-file, you can do so by filing Form 8862. If you your previous denial was due to a clerical error, you don't need to file the form. 
 
Know The Special Qualifiers: There are special rules for certain jobs and instances that you should be aware of. While nontaxable military pay is not eligible for inclusion for figuring your earned income tax credit, combat pay is. And even if you are serving outside of the U.S., military members serving anywhere are considered in the United States for tax purposes. There are also special considerations for members of the clergy. Minister's housing can be included in earning incoming listings and requires you to fill out specific forms. There are also exceptions and rules specific to those with disabilities and disaster situations.

Michele Filipkowski is on a team of writers who cover a variety of topics in their writing. Follow her @micheleashley89