What is earned income credit?

Question

I started to live with my GF for about 3-4 months now and she said sumthing about recieving earned income credit on my taxes for putting money towards the kids. I want to know more about what it is and what the procedure and requirements are..

Answer 1

I'm afraid your GF may be a gold-digger, but she could simply be misinformed.  Of course, if you want to continue living with her, you can contribute money toward the kids, but it won't do you any good for tax purposes unless you get married or formally adopt them.  In fact, it could, conceivably, hurt her taxes, if you end up supplying more than half of (one of) the kids "support".

The earned income credit provides an offset against social security taxes for low-income taxpayers.  If you have dependent children, the maximum income for the credit and the maximum credit are increased.  However, if she can claim a child as a "qualifying child", (which seems likely), you cannot claim the child as a "qualifying relative".

Answer 2

The earned income credit is a gimmick to give you a tax credit if you make a low income.  It increases as your income goes up to a certain point, then declines until you reach a certain point where it becomes zero.

The credit generally requires you to have a dependent child.  But there is a small credit available for single people over a certain age with very low incomes

A lot of people cheat in order to get the credit which can get you a tax refund even if you have paid in NO tax.

Answer 3

Do you have children of yours (not hers) living with you?  If so, and your interest is below certain limits. you are very likely eligible for some extra money back on your tax return if you have income from working during the year.  If you are paying child support but the kids don't live with you, you aren't eligible.