2016 Earned Income Credit

2016 Earned Income Credit Income Limits, Maximum Credit Amounts and Tax Law Updates

2016 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates, 2016 Earned Income Credit Details Below:

2016 Earned Income and AGI Limits

Earned income and adjusted gross income (AGI) must each be less than:

If filing… Qualifying Children Claimed
Zero One Two Three or more
Single, Head of Household or Widowed $14,880 $39,296 $44,648 $47,955
Married Filing Jointly $20,430 $44,846 $50,198 $53,505

Investment Income Limit

Investment income must be $3,400 or less for the year.

Maximum Credit Amounts

The maximum amount of credit for Tax Year 2016 is:

For more information on whether a child qualifies you for EITC, see:

The American Tax Relief Act of 2012

The American Tax Relief act extended the relief for married taxpayers, the expanded credit for taxpayers with three or more qualifying children and other provisions to December 31, 2017

 

What is 2016 Earned Income Credit?

Earned income includes all the taxable income and wages you get from working or from certain disability payments.

There are two ways to get earned income:

You work for someone who pays you

or

You own or run a business or farm

Taxable earned income includes:

Nontaxable Combat Pay election. You can elect to have your nontaxable combat pay included in earned income for EITC. The amount of your nontaxable combat pay should be shown on your Form W-2, in box 12, with code Q. Electing to include nontaxable combat pay in earned income may increase or decrease your EITC. See Publication 3. Armed Forces Tax Guide, for more information.

Examples of Income that are Not Earned Income:

 

Author: admin on December 11, 2015
Category: Tax Credits
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