Tax Tip: Earned Income Tax Credit Is Not So Easy to Understand
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iStockphoto/Thinkstock(NEW YORK) — The earned income tax credit is supposed to be a big help for lower income tax payers. But it can be confusing and is one of the least understood sections on your tax form.
The unfortunate part is that complexity of the earned income tax credit actually results in many people not claiming it, according to Bob Meighan with TurboTax. Its complicated formula almost requires software or a professional to help you through that area.
Meighan says that confusion can lead to a lot of lost money.
“If you’re sort of in the lower income tax bracket, and you have a child, the earned income tax credit can result in several thousand dollars worth of credit for you,” Meighan explains.
The qualifications are a little tricky to figure out, but if you have children and your family income is below $50,000 dollars, it’s worth finding out the income limits. They adjust for inflation, so if you didn’t qualify last year, you might this time.
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