J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

25.10 Qualifying Tests for EIC

The earned income credit (EIC) may be claimed not only by workers with qualifying children who meet the tests below, but also, in limited cases, by childless workers. For 2012, the maximum earned income credit is $3,169 if you have one qualifying child, $5,236 if you have two qualifying children, $5,891 if you have three or more qualifying children, and $475 if you do not have a qualifying child. There is a phaseout of the credit (25.11). You look up the credit amount in IRS tables included in the tax form instructions. The EIC is “refundable” you will receive a refund from the IRS if the credit exceeds your tax liability.

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Law Alert

Higher EIC for Some Families

A higher credit rate for 2012 is allowed to taxpayers with three or more qualifying children. Also, a more favorable phaseout range is allowed for married couples filing jointly. These increases are scheduled to expire at the end of 2012 but Congress may extend them to 2013; see the e-Supplement at jklasser.com for an update.

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Claiming the EIC for 2012 With Qualifying Children

You may claim the EIC on a 2012 return if you:

• Have earned income, such as wages and self-employment earnings, and also adjusted gross income, under the following amount: $36,920, or $42,130 if married filing jointly, if you have one qualifying child; $41,952, or $47,162 ...