Earned Income Tax Credit for Working Grandparents
The Earned Income Tax Credit, or EITC, is a federal income tax credit for workers whose annual income is $53,505 or less (2016), depending on marital status and number of eligible dependents. There are other eligibility limits, such as the requirement that investment income be $3,400 or less for the year. This refundable credit can reduce taxes up to $6,269 and is available to all workers who meet eligibility requirements.
This credit is frequently overlooked by working grandparents and other relatives who care for qualifying children who live with them. Be aware, however, that there are certain restrictions if the child’s parents also qualify for the EITC.2 For more information, speak with your tax professional. You can also check out this IRS document: Publication 596, Earned Income Credit.
The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at firstname.lastname@example.org or call us at (952) 460-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.
Ready to Take The Next Step?
For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.