The Credit for Low Income Individuals (CLI) is a tax credit for people who work hard and don’t make much money. You must meet certain requirements to be eligible. If your total family Virginia adjusted gross income is less than the amounts established under federal poverty guidelines, or the United States Department of Health and Human Services Poverty guidelines, you may qualify to claim the CLI.
Virginia CASH (Creating Assets, Savings, and Hope)
A team headed by the Virginia Community Action Partnership, along with the Virginia Department of Social Services and the Internal Revenue Service, is working to raise statewide awareness of the EITC program through the Virginia CASH (Creating Assets, Savings, and Hope) Campaign. Beginning in January 2006, localities throughout Virginia will offer free tax preparation services by certified volunteers.
Qualifying for the Virginia Earned Income Credit
You may qualify to claim the Credit for Low Income Individuals (CLI) if your total family Virginia adjusted gross income is below federal poverty guidelines. Family Virginia adjusted gross income includes the total Virginia adjusted gross income for you, your spouse and your dependents, even if they do not file their own Virginia returns. If you and your spouse file separate returns, the family income includes income from your return, your spouse’s return and any income for any dependents claimed on either return. Only one spouse may claim the CLI. For more information on computing Virginia adjusted gross income, refer to Form 760.
Maximum Virginia Earned Income Tax Credit Amount
The maximum credit you may claim is $300 for each personal and dependent exemption claimed on your Virginia return. Unlike the Federal Earned Income Credit, this credit is not refundable. The amount of CLI claimed may not exceed your tax liability. Excess credit amounts may not be carried forward to future years.
Who can claim Virginia EITC?
You may not claim this credit if you, your spouse or any dependent listed on your return claimed one or more of the following exemptions, deductions or subtractions:
- subtraction for wages or salaries received by members of the Virginia National Guard
- subtraction for up to $15,000 of military basic pay for military service personnel on extended active duty
- subtraction for up to $15,000 of salary for a federal or state employee whose annual salary is $15,000 or less
- additional personal exemption for blind or aged taxpayers (NOTE: If you qualify for both the CLI and an additional exemption for blindness, it may be to your advantage to claim the CLI, rather than the additional exemption).
- age deduction
In addition, you cannot claim this credit if you were claimed as a dependent on another taxpayer’s return.
Claiming Virginia Earned Income Tax Credit
Claiming the credit is a two-step process. First, you must determine if you qualify for the credit. If so, then you must compute your allowable credit. Use the following table to see if you qualify for the CLI:
Income Requirement for Virginia EITC
If the number of eligible exemptions is: Your family Virginia adjusted income must be less than
For each additional exemption over 8, add $4,020 to the guidelines. Eligible exemptions include personal exemptions only – you may not claim the CLI if you also claim additional exemptions for blindness or age.
Qualifying for Virginia EIC
If you qualify for the credit, multiply the total number of personal exemptions claimed on your return by $300. The credit cannot be more than your total tax as shown on line 17 of your income tax return, Form 760. Use Schedule ADJ to report the credit.
Virginia Earned Income Tax Credit
The Virginia Credit for Low Income Individuals is based on the amount of a taxpayer’s federal EITC and isnot refundable.
- State: Virginia
- Percentage of federal credit: 20%
- Is it refundable? No
- Income eligibility criteria same as federal credit? No. Eligibility for the Virginia credit is based on family size and whether a taxpayer’s Virginia adjusted gross income is equal to or less than the federal poverty level for the taxpayer’s family size. For a family of four that means an Virginia AGI of $20,050 or less.
More Information on claiming Virginia EITC
Low-income working families in Virginia pay more in state and local taxes as a share of their income than high-income Virginians. And the contrast is pretty stark. Households making under $20,000 a year pay, on average, almost 9 percent of their income in state and local taxes. But households that earn at least $479,000 a year pay under 5 percent of their income in state and local taxes.