Earned income credit

The earned income tax credit is designed for low-income taxpayers. It reduces the amount of income tax owed and partially offsets increases in living expenses and Social Security taxes. To claim the credit, you must meet certain income limits. The maximum amount of earned income credit has also increased to $2,650. However, the amount of credit you receive dependson the number of children living with you. And, you can't claim an earned income credit if you're claimed as a dependent on someone else's return. To help you calculate your earned income credit, the Internal Revenue Service provides tables showing the size of the credit you should claim based on your earned income. In the event that an earned income credit exceeds the amount you owe, the excess will be refunded to you. You can determine eligibility for the credit on the last page of IRS Publication 596. For more information on earned income credits, consult a tax advisor or call the toll-free number for federal tax information and assistance at 1-800-829-1040.