2016 Earned Income Tax Credit Refund Check

The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or debit cards until the week of February 27.

 

Refund Timing for Earned Income Tax Credit

Be careful not to count on getting an EITC refund by a certain date, especially when making major purchases or paying other financial obligations. You don’t need to wait until Feb. 15 to file your tax return. While the IRS must hold the refund until Feb. 15, it will begin taking the steps it normally does to process your tax return once the filing season starts.

When will EITC Refund arrive in bank account?

The IRS will begin to release EITC/ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or debit cards until the week of February 27 — if there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits.

 

Check Status of 2016 EITC Refund

Check Where’s My Refund on IRS.gov or the IRS mobile app, IRS2Go, after February 15 for your personalized refund status. Taxpayers will not see a refund date on Where’s My Refund ‎or through their software packages until then. The IRS, tax preparers and tax software will not have additional information on refund dates, so taxpayers should not contact or call them about refunds before the end of February.

It takes additional time for refunds to be processed after leaving the IRS, and for financial institutions to accept and deposit them to bank accounts and products like debit cards. Also many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day affects their refund timing.

 

Additional Child Tax Credit Refund

In addition to the earned income tax credit, the refunds will be delayed for the additional child tax credit refunds as well. This applies to the entire refund, even the portion not associated with these credits.

 

IRS Tax Refund Security Measures

To better protect taxpayers, the IRS recently upgraded its identity verification process for certain online self-help tools. The purpose is to prevent taxpayer impersonations and account takeovers by identity thieves. All IRS Taxpayer Assistance Centers will offer appointment service by December 2016. If you believe your tax issue cannot be handled online or by phone, always check IRS.gov for days and hours of service as well as services offered at the IRS TAC location you plan to visit. For most services you must call to make an appointment.

Remember, while the IRS will begin to issue EITC/ACTC refunds starting Feb. 15, you should not count on actually seeing your refund until the week of Feb. 27 — if you chose direct deposit or a debit card and there are no processing issues with your tax return. Your refund should only be deposited directly into accounts that are in your own name, your spouse’s name or both, if it’s a joint account. These are some of the reasons a financial institution may reject a direct deposit, resulting in a paper check. Also, no more than three electronic refunds can be directly deposited into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a paper refund.

 

Will calling the IRS help me get my refund any faster?

Calling the IRS will not speed up your refund.  Phone and walk-in representatives can only research the status of your refund if it has been 21 days or more since you filed electronically, more than 6 weeks since you mailed your paper return, or Where’s My Refund? directs you to contact us. If we need more information to process your tax return, we will contact you by mail. Otherwise Where’s My Refund? has the most up to date information available about your refund. Use the IRS2Gomobile app or use the Where’s My Refund? tool. Both are available 24 hours a day, 7 days a week.

 

 

 

 

Delayed Earned Income Tax Credit Refund in 2017

The earliest taxpayers can receive the 2016 earned income tax credit in 2017 will be on February 15. Taxpayers who claim the 2016 Earned Income Tax Credit or Additional Child Tax Credit early during tax season may not be receiving their refunds as early as they expect. The IRS has increased security around the issuance of earned income tax credit to protect the public from earned income tax credit fraud. At present, the IRS plans to hold the entire refund. Taxpayers and preparers should submit returns as they normally do, and the IRS will begin accepting and processing tax returns once filing season begins.

 

EITC Refund Delays

Most taxpayers who file should not be effected by these EITC delays, but many people claiming the EITC file their taxes in January when they receive their W2s. This means that the February deadline could be particularly important because many people might be used to receiving the refunds much earlier. Thus, it is important to not worry if there is a little more delay in receiving earned income tax credit benefits because this is a new planned policy.

 

When will you get 2016 tax refunds?

The IRS will begin releasing EITC and ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of Feb. 27 (assuming there are no processing issues with the tax return and the taxpayer chose direct deposit). This additional period is due to several factors, including banking and financial systems needing time to process deposits. After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts and products. The IRS reminds taxpayers many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing.

 

Earned Income Tax Credit Refunds Delayed

Beginning in 2017, the IRS will hold refunds on EITC and ACTC returns until February 15. The delay results from the Protecting Americans from Tax Hikes Act of 2015 [PATH Act]. This law is intended to help prevent revenue lost due to identity theft and refund fraud.  Under this new law, the IRS cannot release the part of the refund that is not associated with EITC or ACTC. For years, the IRS has underestimated the risk of fraud involved with its EITC tax credit program, resulting in $13 – $15 billion in improper payments annually.

 

Additional Child Tax Credit Delays

Rampant fraud in the Additional Child Tax Credit program is another problem that the IRS has been trying to fix. Those claiming the additional child tax credit can also expect to face delays in receiving their refunds. The Additional Child Tax Credit is a $1,000 refundable credit designed to help low-income individuals reduce their tax burden. The IRS says it is provided to qualifying individuals even if no income tax is withheld or paid, meaning the credit can exceed the tax liability. The IRS began taking steps in late fiscal year 2015 to improve the risk assessment process for the refundable tax credits. As part of that effort, we are continuing to evaluate the risk assessments and identify opportunities to make them more robust.

 

When do you get EITC money in 2017?

Even if you file your taxes once the tax season begins, you will not be able to receive from the earned income tax credit before February 15. It is still advantageous to file early because this will ensure that you get your funds as soon as possible. This is intended to give the IRS more time to help detect and prevent fraud. As you might imagine, the IRS faces a lot of fraud attempts. In fact, tax time is a great time for scammers to try and commit fraud. The IRS still expects to issue most refunds in less than 21 days

 

EITC Fraud

This new  delay in receiving EITC results from people defrauding the EITc progam. The IRS estimates that between 21 percent to 26 percent of EITC claims are paid in error. Some of the errors are unintentional caused by the complexity of the law, but some of the claims are intentional disregard of the law. The 2016 tax season is the first uear in which the IRS has taken additional steps to prevent EITC fraud by delaying tax refunds from people who claim the EITC.

IRS has a Return Preparer Strategy that includes outreach and compliance activities. Outreach includes educational materials to ensure preparers have complete and current information about EITC eligibility, filing requirements and their EITC due diligence requirements.

The IRS has launched initiatives since 2010 to reduce EITC errors. Since the current estimate of the EITC error rate is based on IRS analysis of data from tax year 2010, the error rate could be modestly lower now.

 

What is the EITC?

The earned income tax credit or earned income credit(EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples. Families with children will receive extra benefits. The amount of EITC benefit depends on a recipient’s income and number of children. More information on the 2016 EITC and the 2017 EITC. A low-income worker can receive refundable tax credits from the Earned Income Tax Credit program when they meet certain requirements for income and age.

2017 Earned Income Tax Credit EITC

The IRS is going to announce the 2017 Earned Income Tax Credit soon. Taxpayers who are eligible for the 2017 EITC may receive a substantial benefit. To summarize, the EITC, Earned Income Tax Credit, is a benefit for working people who have low to moderate income. It supplements wages by rewarding people who work.  It reduces the amount of tax you owe and may also give you a refund. This means that the EITC may put money in your pocket at tax time if you qualify for the 2017 Earned Income Tax Ccredit. If you are unfamiliar with this term, the EITC is also called EIC or Earned Income Credit. Different tax preparers or programs may refer to this differently.

 

When can you claim the 2017 EITC?

You can claim the 2017 earned income tax credit when you file your tax return in 2018. In 2017, you may be able to file for the 2016 Earned Income Tax Credit. The difference between the 2016 EITC and the 2017 EITC is amount. Using a tax software will help ensure that you are filing for the right year of EITC Benefit. When you prepare your tax return, most tax software and tax accountants automatically check to see if you qualify for the Earned Income Tax Credit. If you qualify for the EITC, they will calculate the exact amount of your credit for you. It will also generate the form(s) you need to claim your full credit and fill them out for you.

 

2017 EITC Income Limits

Some changes to the 2017 Earned Income Tax Credit (EITC) may put more money in your pocket in 2017 if you are married, or if you have three or more qualifying children. The IRS is expected to announce the amount of earned income credit taxpayers may claim in 2017 soon.

To figure out if you are eligible for the 2017 earned income tax credit, you can use the IRS Earned Income Credit Worksheet (EIC Worksheet) in the instruction booklet for Form 1040, Form 1040A, or Form 1040EZ, and the Earned Income Credit (EIC) Table in the instruction booklet, or use the EITC Assistant Tool online. The EITC is designed to encourage and reward work. As noted, a worker’s EITC grows with each additional dollar of earnings until reaching the maximum value.

2017 Earned Income Tax Amounts


The earned income tax credit (2017 EITC) ranges from $510 to $6.318 in benefits for tax filers in 2017. Remember, these are the 2017 EITC numbers. According the the 2017 EITC table, you will get these amounts when you file taxes in 2018.  The instructions for the Form 1040 series provide tables showing the amount of the earned income credit for each type of taxpayer. The 2017 earned income amount is the amount of earned income at or above which the maximum amount of the 2017 earned income credit is allowed.

 

2017 Earned Income Credit Table

 Number of Qualifying Children for  EITC
One Two Three or More None
2017 Earned Income Amount $10,000 $14,040 $14,040 $6,670
Maximum Amount of Credit $3,400 $5,616 $6,318 $510
Threshold Phaseout Amount $18,340 $18,340 $18,340 $8,340
Completed Phaseout Amount $39,617 $45,007 $48,340 $15,010
Married EITC Threshold $23,930 $23,930 $23,930 $13,930
Completed Phaseout Amount Filing Joint $45,207 $50,597 $53,930 $20,600

 

The threshold phaseout amounts and the completed phaseout amounts shown in the table below for married taxpayers filing a joint return include the increase as adjusted for inflation for taxable years beginning in 2017. The EITC “threshold phaseout amount” is the amount of adjusted gross income above which the maximum amount of the 2017 earned income tax credit begins to phase out. The EIRC “completed phaseout amount” is the amount of adjusted gross income at or above which no earned income tax credit in 2017 is allowed.

 

Who can claim 2017 Earned Income Tax Credit (EIC)?

When filing taxes for 2017 (due in April 2018), working families with children that have annual incomes below about $39,000 to $53,300 (depending on marital status and the number of dependent children) may be eligible for the federal EITC. To claim the 2017 EITC on your tax return, you must meet all the following rules:

  • You, your spouse (if you file a joint return), and all others listed on Schedule EIC, must have a Social Security number that is valid for employment
  • You must have earned income from working for someone else or owning or running a farm or business
  • Your filing status cannot be married filing separately
  • You must be a U.S. citizen or resident alien all year (If you are a nonresident alien married to a U.S. citizen or resident alien, see Publication 519, U.S. Tax Guide for Aliens)
  • You cannot be a qualifying child of another person
  • You must meet the earned income, AGI and investment income limits (income limits change each year), see EITC Income Limits for the tax year amounts
  • And you must meet one of the following:
    • Have a qualifying child (see who is a qualifying child below)
    • If you do not have a qualifying child, you must:
      • be age 25 but under 65 at the end of the year,
      • live in the United States for more than half the year, and
      • not qualify as a dependent of another person.

       

When can you get 2017 Earned Income Credit?

IRS cautioned taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. Though IRS issues most refunds in less than 21 days, some returns are held for further review. In addition, starting next year, some people will get their refunds a little later. The Protecting Americans from Tax Hikes (PATH) Act requires IRS to hold the refund for any tax return claiming either the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until Feb. 15. By law, IRS must hold the entire refund, not just the portion related to the EITC or ACTC.

 

What Is Earned Income for the Earned Income Tax Credit?

Not all income is earned income. “Earned” income is any money you were paid for doing work, whether you work for yourself or for someone else. The following are examples of earned income:

  • Salaries
  • Wages
  • Tips
  • Commissions
  • Royalties
  • Self-employment net earnings
  • Jury duty pay
  • Union strike benefits
  • Long-term disability benefits received before minimum retirement age
  • Nontaxable combat pay

 

Same Sex Marriage and the 2017 Earned Income Tax Credit

The U.S. Department of the Treasury and the Internal Revenue Service ruled in 2013 that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.

Thus, for claiming a same-sex marriage is important for claiming the EITC.

 

Claiming EITC for Prior Tax Years

You can claim the EITC from prior tax years if you missed it previously. It is essential to understand a few things. The income limits for the Earned Income Credit have been adjusted for 2015, so even if you didn’t qualify for the EITC in the past, you may be able to claim it this year. The maximum amount of the credit has also increased.

 

How to Claim EITC from Prior Tax Years

Many individuals miss out on valuable tax credits because their income was below the amount requiring them to file or they had no taxes withheld from their paychecks. But, you must file a tax return to claim tax benefits such as the EITC, the child tax credit and the education credits. If you filed your own taxes or someone else prepared them for you, you need to file an amended return. Find out if you were eligible for EITC and should file and how to get help below. And, see Ten Facts on Filing an Amended Return.

  • For 2011, you need to file your tax return or amend your return before April 17, 2015
  • For 2012, you need to file your tax return or amend your return before April 15, 2016
  • For 2013, you need to file your tax return or amend your return before April 15, 2017
  • For 2014, you need to file your tax return or amend your return before April 15, 2018
  • For 2015, you need to file your tax return or amend your return before April 15, 2019
  • For 2016, you need to file your tax return or amend your return before April 15, 2020

It’s not too late to file your tax returns for 2013, 2014 and 2015 and claim the EITC and other important tax benefits if you were eligible.

Where to Get Help Preparing Your Tax Forms

Free help preparing your return, all volunteer sites help you prepare your current year tax return and help you determine if you qualify for EITC. Some of the sites also help you claim EITC for earlier years. Find a location for free tax return preparation by volunteers here. If you go to or have a tax return preparer, ask your preparer about your prior year tax returns and check out, I’m Paying Someone to Do My Return, What Should I Know?

 

Use the EITC Assistant for Prior EITC Years

By answering questions and providing basic income information, you can use our EITC Assistantto:

  • find out if you are eligible for EITC;
  • determine if your child or children meet the tests for a qualifying child; and
  • estimate the amount of your credit.

Make sure you use the right EITC assistant. Income limits and credit amounts change from year to year.

 

Important Notes on Claiming EITC

  • You need to complete the full assistant at one time. When you exit the assistant, all the information you entered is erased.
  • You cannot use any income received for work performed while an inmate to claim EITC.This includes amounts for work performed while incarcerated, in a work release program, or while in a halfway house.
  • If the IRS audited you and disallowed the EITC, you may have special filing requirements and limitations. See Consequences of Errors on Your EITC Returns.

Disability retirement benefit payments are included in earned income if you are younger than your minimum retirement age (the earliest age you could have received a pension had you not been disabled). After your minimum retirement age, any disability benefit payments will be considered taxable pension payments and may not be counted as earned income. Social Security Disability Insurance and private disability insurance payments for which you paid the premiums are not considered earned income for the purposes of calculating the EITC.

 

Adopted Children and EITC

If your adopted child has not yet been issued a Social Security Number, he/she may be assigned an Adoption Taxpayer Identification Number for tax purposes. Unfortunately, this number may not be used to claim a Qualifying Child for the Earned Income Credit. To claim the EITC, you may file an amended tax return once your child has been assigned their SSN.

Is child support considered earned income when calculating the earned income credit?

Is child support considered earned income when calculating the earned income credit?

No, for purposes of calculating the earned income credit, child support is not considered earned income.

Examples of items that are not earned income include interest and dividends, pensions and annuities, social security and railroad retirement benefits (including disability benefits), alimony and child support, welfare benefits, workers’ compensation benefits, unemployment compensation (insurance), nontaxable foster care payments, and veterans benefits, including VA rehabilitation payments. Do not include any of these items in your earned income.

Child Support and the EITC

If both parents who were never married want to claim the earned income credit, which parent is entitled to claim the credit as an eligible individual with a qualifying child?

If they otherwise meet all of the requirements to claim the earned income tax credit (EITC), unmarried parents with a qualifying child may choose which parent will claim the credit.

  • If there are two qualifying children, each parent may claim the credit based on one of the children.
  • One parent may claim the credit based on both children.
  • If both parents claim the child as a qualifying child for the EITC, the IRS will apply tie-breaker rules and treat the child as the qualifying child of the parent with whom the child lives for the longer amount of time in the tax year. If the child lives with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who has the higher adjusted gross income (AGI) for the tax year.
  • If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who has the highest AGI for the tax year.
  • If a parent can claim the child as a qualifying child but neither parent claims the child, the child is treated as the qualifying child of the person who has the highest AGI, but only if that person’s AGI is higher than the AGI of any of the child’s parents who can claim the child as a qualifying child.

 

Qualifying Dependents and EITC

Must I be entitled to claim a child as a dependent to claim the earned income credit based on the child being my qualifying child?

You do not have to be entitled to claim the child as a dependent to claim the earned income credit based on the child being your qualifying child. However, the child cannot file a joint return for the year except as a claim for refund of income tax withheld or estimated tax paid. If your qualifying child was married at the end of the year, he or she cannot be your qualifying child unless you meet one of the following conditions:

  • You are entitled to claim an exemption for the child, or
  • The reason you are not entitled to claim an exemption for the child is that you released a claim to a dependency exemption for the child under the special rule for divorced or separated parents or parents who live apart.
For more information, refer to Qualifying Child in Publication 596Earned Income Credit, and Earned Income Tax Credit (EITC).

More Information about Child Support and Earned Income Credit (EIC)

Whenever taxes and child support mix, it is usually a complicated situation. If there is a large sum of money involved, you are almost certainly better off speaking with a professional. For help preparing your taxes and understanding how child support affects your finances, you may consider contacting an experienced tax attorney.

New York Earned Income Tax Credit EITC Claim

For tax years beginning on or after January 1, 2006, and before January 1, 2017, New York State full-year residents who are noncustodial parents and pay child support may be eligible for the noncustodial parent New York State earned income credit. This credit may be claimed instead of the New York State earned income credit. See Form IT-209, Claim for Noncustodial Parent New York State Earned Income Credit, for further information on this credit. Below is information on claiming the New York Earned Income credit in 2016 for your 2015 taxes.

 

New York State Noncustodial Parent Earned Income Tax Credit

You can claim this credit if you pay support pursuant to a court order for children who don’t live with you. You can claim this credit or the New York State EITC, but not both. Calculate what you would receive under each credit and choose the one that is best for you. This Earned Income Tax Credit is just one of a number of New York State initiatives to address the needs of young, low-income working noncustodial parents in an attempt to help them become more involved in the economic and social well-being of their children.

 

Claiming NY EITC

Earned income tax credits are for people who work and meet certain income guidelines. The amount of the credit varies, depending on your filing status, family’s earned income, and the number of qualified children. You may get money back when you file your tax return, even if you do not owe any taxes. The Internal Revenue Service (IRS), New York State, and New York City all offer earned income tax credits. A EITC money does not affect your eligibility for: Public Assistance SNAP benefits Supplemental Security Income public housing Medicare

 

Who qualifies for the 2015 New York EITC?

To qualify for the New York State earned income credit (NYS EIC) you must have claimed the federal earned income credit. To qualify for the New York City earned income credit (NYC EIC) you must: – have been a full-year or part-year resident of New York City; and – have claimed the federal earned income credit. Note: Because of the different methods for computing the two credits (NYS EIC and NYC EIC), if you qualify for the NYC EIC, you may end up with a NYC EIC amount even if you do not end up with a NYS EIC amount (line 16 of Form IT-215). Be sure to complete Worksheet C, New York City earned income credit, on page 3 to compute your NYC EIC. If you are a resident or part-year resident, you may qualify for a refund of any earned income credit in excess of your tax liability. Nonresidents of New York State do not qualify for a refund of the NYS EIC.

 

To be eligible for the Federal and New York State EITC, you must:

  • Have worked full or part time at some point during the calendar year,
  • Be a single or married person raising “qualified” children at home,
  • Have income below *$39,131 (or $44,651 if married) – for families with one child,
  • Have income below *$44,454 (or $49,974 if married) – for families with two children,
  • Have income below *$47,747 (or $53,267 if married) – for families with three or more children, or
  • Be a worker between the ages of 25 and 65 and earn less than $14,820 (or $20,330 if married) for families with no children.

 

How to claim the New York Earned Income Tax Credit for 2016?

To claim the NYS EIC, you must complete Form IT-215 using the information from your federal return, worksheets, and, if applicable, the federal earned income credit line instructions. You must file Form IT-215 with your New York State income tax return. To claim the NYC EIC, you must: • complete Form IT-215, using the information from your federal return, worksheets, and, if applicable, the federal earned income credit line instructions; • complete Worksheet C, New York City earned income credit, on page 3; and • file Form IT-215 with your New York State income tax return if you qualify for the credit(s).

 

Claiming the NY EITC

You must file an income tax return in order to receive the credit, even if you do not owe any taxes. Electronic filing is the easiest way to file your return and the fastest way to get your refund. If you cannot e-file, use these forms: Federal (IRS) EITC: file Form 1040 (or 1040A) and attach Schedule EITC New York State EITC: file Form IT-201 and attach Form IT-215 New York City: city residents who qualify for the NYC EITC can claim it on their New York State returns.

 

The New York EITC is refundable

Be sure to maintain business records throughout the year for which you plan to claim the credit. This is because a taxpayer must prove “earned income” to claim the credit. Remember, the taxpayer’s New York EITC is then reduced by the amount of the taxpayer’s New York Household Credit.  The New York EITC is refundable.

 

California Earned Income Credit CA EITC Information (CalEITC)

It is possible that you are eligible for the California Earned Income Tax Credit (CalEITC) and do not know it. If you do not have dependents and are between 25 and 65 years of age, you must earn less than $6,580 per year to be eligible. If you have one or two dependants, you can earn up to $13,870 and still be eligible.

What is the CalEITC?

If you want to claim your EITC, you must file your tax returns. The federal EITC lowers the amount of federal taxes you may owe so by claiming the federal EITC, if you owe federal taxes, the amount could be less than you think- thanks to the EITC. Information about 2017 Earned Income Tax Credit.

What is the California Earned Income Tax Credit (CalEITC) for 2015 taxes?

The CalEITC is a tax credit that puts money back into the pocket of individuals and families in California, and that is available for the first time this year. CalEITC credit could increase income of approximately 600,000 families who are eligible to receive it. Governor Jerry Brown and the Legislature created the first-ever California Earned Income Tax Credit (CalEITC). California joins 24 other states and the District of Columbia in adopting a state EITC to supplement the federal EITC.

Who is Eligible for the CalEITC in 2016?

You may be eligible for the CalEITC if:

  • You have earned income within certain limits (see chart below), AND
  • You, your spouse, and any qualifying children each have a social security number (SSN), AND
  • You do not use the “married/RDP filing separate” filing status, AND
  • You lived in California for more than half the tax year

Review the chart below to see if you may be eligible and how much you may qualify for.

Number of Children Maximum Income CalEITC* Federal EITC*
None $6,850 $214 $496
1 $9,880 $1,428 $3,305
2 $13,870 $2,358 $5,460
3 or more $13,870 $2,653 $6,143

*Up to of CalEITC

Use our EITC Calculator for more exact results by clicking here and learning more about the CalEITC

 

How will the CalEITC and the federal EITC work together?

Federal Earned Income Tax Credit (EITC): A cash back tax credit that puts money back in the pockets of the nation’s working families and individuals with incomes of less than $14,820 (with no dependents) and up to $53,267 (for those with three or more dependents).

How does CalEITC Work?

Both credits put money back into the pocket of individuals and the working families of California, but some of the eligibility requirements are different.
Both credits will be available this fiscal year. Californians who are eligible for the credit CalEITC probably will be also eligible for the federal EITC. This will significantly increase the income of individuals and eligible families Is it not eligible for the credit CalEITC? See the requirements for the federal EITC.

More Information about CalEITC

CalFile: A simple, easy-to-use service that offers free, direct to government e-filing of your California return. To use CalFile, you must have been a California resident for the whole year.

CalEITC4Me: A statewide campaign dedicated to raising awareness about the benefits of the Earned Income Tax Credit for working families and all Californians. Learn more at CalEITC4Me.org.

California Earned Income Tax Credit (CalEITC): A new cash back tax credit that puts money back in the pockets of California’s working families and individuals with incomes of less than $6,580 (with no dependents) and up to $13,870 (for those with two or more dependents), available for the first time this tax season. Through this statewide collaboration, our goal is to target and engage as many eligible individuals and families as possible to file their taxes and claim the CalEITC, in addition to the federal EITC. While putting money back into the pocket of California’s working families, we will also showcase to the Governor and the Legislature the success and impact of this program for California’s working families, leaving no questions about the significance of the CalEITC.

 

CalEITC and other Benefits

Based on your age and if you have dependents. If you are 65 or younger by the end of 2015, do not have any dependents and met the income requirements, you are eligible. If you have dependents and meet the income requirements, your age is not a factor in eligibility. See questions one and two for eligibility facts.

IRS 2016 Income Tax Brackets and Rates

What are the 2016 income tax rates?

Each year, the IRS uses the Consumer Price Index (CPI) to calculate the past year’s inflation and adjusts income thresholds, deduction amounts, and credit values accordingly. For 2016 income tax brackets, inflation was relatively low and they were not increased much more past the 2015 income tax brackets. The IRS announced the annual inflation adjustments for a number of provisions for the year 2016, including tax rate schedules, tax tables and cost-of-living adjustments for certain tax items. This will affect many numbers used to determine tax liabilities.

Remember, you’ll use these tax brackets and tax rates when paying your 2016 taxes in early 2017. Furthermore, with the recent presidential election, President Donald Trump could change tax rates. This could go into effect for 2017 and replace these tax rates if Trump’s tax changes are passed through congress.

 

2016 Income Tax Brackets and Rates

In tax year 2016, the income limits for all brackets and all filers will be adjusted for inflation and you can see information on the specific information about 2016 tax rates on the table below. As you can see, the top marginal income tax rate of 39.6 percent will hit taxpayers with adjusted gross income of $415,050 and higher for single filers and $466,950 and higher for married filers.

 

2016 Taxable Income Brackets and Rates
Tax Rate Single Filers Married Joint Filers Head of Household Filers

10%

$0 to $9,275 $0 to $18,550 $0 to $13,250

15%

$9,275 to $37,650 $18,550 to $75,300 $13,250 to $50,400

25%

$37,650 to $91,150 $75,300 to $151,900 $50,400 to $130,150

28%

$91,150 to $190,150 $151,900 to $231,450 $130,150 to $210,800

33%

$190,150 to $413,350 $231,450 to $413,350 $210,800 to $413,350

35%

$413,350 to $415,050 $413,350 to $466,950 $413,350 to $441,000

39.6%

$415,050+ $466,950+ $441,000+
Source: Author’s Calculations.

2016 Standard Deduction and Personal Exemption

Again, the standard deduction that taxpayers are able to take on their tax returns is also indexed for inflation and changes for. The 2016 standard deduction for single and married couples filing jointly will not increase in 2016. This is same standard deduction for 2015. For taxpayers filing as head of household, it will increase by $50 from $9,250 to $9,300. This is a very small amount for the standard deduction to increase in 2016. Since there was not inflation in 2015, many tax items such as the standard deduction and personal exemption will not change in 2016.

 

2016 Personal Exemption will be $4,050.

Table 2. 2016 Standard Deduction and Personal Exemption
Filing Status Deduction Amount
Single  $6,300.00
Married Filing Jointly  $12,600.00
Head of Household  $9,300.00
Personal Exemption  $4,050.00

 

Remember, that these are estimates from the Tax Foundation. The actual 2016 income tax brackets could change depending on how the IRS interprets this information. It is best to wait until official IRS income tax brackets are released before making any tax planning decisions.

 

2016 Earned Income Credit Amount

2016’s maximum Earned Income Tax Credit for singles, heads of households, and joint filers is $506, if the filer has no children. The credit is $3,373 for one child, $5,572 for two children, and $6,268 for three or more children.

 

Other tax adjustments for 2016 Tax Year

In addition to the tax brackets and exemption and deduction amounts, there were some other inflation-related tax changes that could potentially affect you:

  • The maximum Earned Income Credit is $6,269, up from $6,242 in 2015.
  • The AGI threshold for the Lifetime Learning Credit is up $1,000 to $111,000 for joint filers.
  • The foreign income exclusion is up $500 to $101,300 for the 2016 tax year.
  • The estate-tax exclusion amount for people who die in 2016 has increased to $5.45 million, up from $5.43 million in 2015.
  • The gift tax exclusion will remain at $14,000

Information on 2015 tax rates and the 2015 standard deduction

2016 Earned Income Credit Amount

The IRS announced the 2016 Earned Income Tax Credit amounts which have some small changes from the 2015 EIC.  In a statement, they noted that for tax year 2016 the maximum Earned Income Credit (2016 EITC) amount is $6,269 for taxpayers filing jointly who have 3 or more qualifying children, up from a total of $6,242 for 2015 EITC. According to the rules, much has stayed the same in calculating the “earned income amount”  This is the amount of earned income at or above which the maximum amount of the earned income credit is allowed. You can see this amount on the 2016 EIC table. Remember that you can claim the 2016 earned income tax credit when you file your taxes in April 2017.

 

2016 Earned Income Tax Credit Amount Information

The earned income tax credit is a powerful tool fighting poverty and changes each year. You can receive this money when filing a yearly tax return and it gets sent along with your tax refund. Each person will receive a different amount and taxpayers must look at the current 2016 EITC table to estimate the amount of credit that will be on their tax return. Some taxpayers may not owe any tax because of the credit and receive a very large tax refund due to the EITC. Remember, that there are small changes from the 2015 earned income credit so taxpayers should always double check before relying on any funds. This could have an effect on the size of the tax refund received by some taxpayers.

The IRS revenue procedure has a table providing maximum credit amounts for other categories, income thresholds and phase-outs for the 2016 EITC. It is updated yearly and below is the most current amounts to claim the earned income tax credit in 2016. Below is a current earned income credit tax table for tax year 2016. Taxpayers can use this EIC table to complete their own taxes or use it to double check that their tax preparer is correcly preparing their 2015 tax return and claiming all credits when they get it done during the 2016 filing season.

 

2016 Earned Income Credit Table (2016 EITC Table)

Number of Qualifying Children
One Two Three or More None
Earned Income Amount $9,920 $13,930 $13,930 $6,610
Maximum Amount of Credit $3,373 $5,572 $6,269 $506
Threshold Phaseout Amount (Single, Surviving Spouse, or Head of Household) $18,190 $18,190 $18,190 $8,270
Completed Phaseout Amount (Single, Surviving Spouse, or Head of Household) $39,296 $44,648 $47,955 $14,880
Threshold Phaseout Amount (Married Filing Jointly) $23,740 $23,740 $23,740 $13,820
Completed Phaseout Amount (Married Filing Jointly) $44,846 $50,198 $53,505 $20,430

 

Claiming 2016 EIC

The 2016 Earned Income Credit still is a tax credit that many Americans will continue to rely upon. Taxpayers can use this 2016 EIC to estimate how much they will receive from the earned income tax credit during the 2016 tax year. When using the EITC table, it absolutely essential to be certain of your tax filing status. This will have a big impact on the amount of the credit that you will receive. Be careful to note that the numbers are slightly different than the 2015 earned income credit. Very important to make sure you are claiming the 2016 earned income tax credit for your 2016 federal income taxes.

 

Restrictions on 2016 Earned Income Tax Credit (2016 EIC)

For taxable years beginning in 2016, the earned income tax credit is not allowed if the aggregate amount of certain investment income exceeds $3,400. This would be if someone owns many investments that are generating income. The IRS does not want people to use the EITC when they have other means of supporting themselves.

There are also other limits related to the advancing the earned income tax credit. If you are unfamiliar if you will qualify for the 2016 earned income tax credit, it may be best to consult with a skilled tax preparer or use software that will allow you to determine the amount you can receive. Most people will know right away if you qualify to receive the earned income credit in 2016 when filing your taxes and make sure you are claiming the correct 2016 EITC amount.

 

Other 2016 Earned Income Credit Information

Remember, certain taxpayers may also be eligible for state earned income tax credit programs. It is important to check with you local state tax authority to learn about other programs that low-income taxpayers could qualify for. There are many out there that can provide a boost to income right away at tax time. More information about the 2017 Earned Income Tax Credit.

It is also important to be honest when claiming the tax credit. The IRS is vigorously enforcing EITC fraud and will investigate suspicious claims. This could lead to large penalties and fines if a taxpayer is caught claiming the EITC when they should not have been claiming it. However, many EITC errors occur primarily because of the complex rules related to claiming the credit and are unintentional. If this is really the case, the IRS could be lenient in fines or penalties levied against the taxpayer who submitted the incorrect EIC claim.

Limits on 2016 Earned Income Tax Credit

They understand that the instructions are long and earned income tax credits can be confusing to professionals as well as ordinary taxpayers. Taxpayers should not hesitate to file for the EITC because they feel they are at an increased risk for an audit if they really should qualify for the funds. Most tax preparers will know exactly how to navigate through issues with claiming the EITC in 2016.

 

More Information about 2015 and 2016 Earned Income Tax credit (2015 EIC)

 

EITC and Veterans

The EITC and Child Tax Credit expansions and the American Recovery and Reinvestment Act of 2009 made more workers eligible for larger refunds, and they remain in effect for workers in 2012. Together, these credits lifted over nine million people and working families above the poverty line in 2010. About one in four current or former armed-forces families with children or 1.5 million military families, receive either the Earned Income Tax Credit or the low-income component of the Child Tax Credit, two tax credits for low- and moderate-income working families, according to analysis of the census and IRS data.

 

Veteran Tax Benefits

In about 280,000 of these families, a parent is currently serving in the Armed Forces. In the rest, a parent is a veteran. The 1.5 million families contain about 3 million children under age 18 and received, on average, about $1,000 per household from the low-income portion of the Child Tax Credit in 2011, and $2,650 from the EITC. Studies have found that children whose families receive more income support from the EITC tend to do better in school and are more likely to attend college and to earn more as adults.

 

Veterans and the Earned Income Credit

Veteran statistics underscore the need for financial-capability strategies and tools in the veteran community. The Department of Veterans Affairs reports that 22.5 million veterans in the United States and more than 37 million veterans, dependents, or survivors are eligible for veteran benefits. According to the Center for American Progress, United States Census Bureau reports that 1.5 million veterans are at risk of homelessness due to poverty. A veteran lives in one in five households that are benefiting from the Low Income Home Energy Assistance Program, which provides heating and cooling assistance.

 

Can Veterans Claims the EITC?

According to the U.S. census in 2007, of the 23.6 million military veterans in the United States, 6 million had disabilities. Again, you can see that synergy that is coming between National Disability Institute and the Department of Veteran Affairs. In addition, an increasing number of disabled veterans returned from combat in Afghanistan and Iraq with post-traumatic stress disorder, PTSD, as well as traumatic brain injury, TBIs, and other mental and physical disabilities that resulted from their tours of duty.

 

The IRS Volunteer Income Tax Assistance, VITA

The IRS Volunteer Income Tax Assistance, VITA, and the Tax Counseling for the Elderly, TCE, programs offer free tax help for taxpayers who qualify. The VITA program generally offers free tax help to people who make $52,000 a year or less and need assistance in preparing their own tax returns. IRS-certified volunteers provide free basic income-tax-return preparation with electronic filing to qualified individuals in local communities. They can inform taxpayers about special tax credits for which they may qualify, such as the Earned Income Tax Credit that Katie talked about earlier, Child Tax Credit, and credit for the elderly or the disabled. VITA sites are generally located at community and neighborhood centers such as libraries, schools, shopping malls, or other convenient locations. The TCE program offers free tax help for all with priority assistance to people who are 60 years of age or older. The providers specialize in answering questions about pensions and retirement issues that are unique to seniors. IRS-certified volunteers who provide tax counseling are often retired individuals associated with non-profit organizations that receive grants from the IRS.

 

IRS FreeFile for Veterans

Free File is a free service that offers free federal tax preparation and e-file options for all taxpayers. Free File is made possible through a public/private partnership between the IRS and commercial tax-software companies. Since 2002, over 30 million taxpayers have taken advantage of this free service, saving over $1 billion in tax-preparation fees in the process. All taxpayers have a Free File option. The traditional, interview-based Free File option is available to 70% of America’s taxpayers. For 2014, that means if you have an adjusted gross income of $58,000 a year or less, you qualify for this service.

 

Can Veterans Files Their Taxes for Free?

Simply go to the Free File link on IRS.gov and click on “Select a Free File Company.” In addition, all taxpayers may use Free File fillable forms at no additional cost. This is a forms-based program. Once you calculate your line-by-line entries, just complete your return and e-file. It´s just that easy. Let me add that if you´re the type of person who is interested in free online tax-preparation services without going to a VITA site, you have several choices to prepare taxes for free from home, work, or anywhere there´s access to the Internet. Software providers make their products available through public/private partnerships with the IRS. Free federal tax preparation and e-file options are available for all taxpayers. However, each company may set its own limits and income thresholds. Review the choices at freefile.IRS.gov.