Earned Income Credit
For 2012 Tax Year

Earned Income Credit
The earned income credit is a refundable credit for low-income workers with earned income. The credit is available for taxpayers with or without children. Maximum credits are: (Income Limitations Apply)

  * $45,060 ($50,270 married filing jointly) with three or more qualifying children
  * $41,952 ($47,162 married filing jointly) with two qualifying children
  * $36,920 ($42,130 married filing jointly) with one qualifying child
  * $13,980 ($19,190 married filing jointly) with no qualifying children

  * $5,891 with three or more qualifying children
  * $5,236 with two qualifying children
  * $3,169 with one qualifying child
  * $475 with no qualifying children

Earned Income Credit
Taxpayers will not be eligible for the earned income credit if the IRS has determined that they have previously claimed the credit fraudulently or recklessly. A fraudulent claim results in a 10-year loss of eligibility. A reckless claim results in a 2-year loss of eligibility.

Foster Child
A very important change to the definition of a foster child has been implemented as a requirement to be able to qualify for the EIC. Instead of the general definition of being any individual other than a child, grandchild, or stepchild of the taxpayer who the taxpayer cares for as if his own child, the new definition states the foster child must be either the taxpayer's brother, sister, step brother, step sister, or descendent (including an adopted child) of such relative, or must be placed in the taxpayer's home by an agency of a state or by a tax-exempt child placement agency licensed by the state. This will now preclude a boyfriend claiming his girlfriend's child (not related to boyfriend) for the EIC credit.