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The Hows of Taxes

Module 11: Earned Income Credit

 

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A tax credit is a dollar-for-dollar reduction of the tax. The earned income credit is a refundable tax credit for certain people who work and whose earned income and AGI are under a specific limit. Many rules apply to the earned income credit. Generally, the taxpayer's earned income, filing status, and number of qualifying children, if any, determine the credit. The earned income credit reduces the tax. Eligible taxpayers can receive the earned income credit even if their tax is zero. This makes it a refundable credit.

materials:

Tax Tutorial
Tax Tutorial: Earned Income CreditDiscover the earned income credit, and learn about the requirements to claim the credit.
Fact Sheet
Fact Sheet: Earned Income CreditPrint this fact sheet on the earned income credit.
Simulation
Simulation 11A: Claiming the Earned Income Credit without a Qualifying ChildHelp Seth Wiggins determine whether he is eligible for the earned income credit. Then, help him complete Form 1040EZ.
Simulation
Simulation 11B: Claiming the Earned Income Credit with a Qualifying ChildHelp Stephen and April Beach determine whether they are eligible for the earned income credit. Then, help them complete Form 1040A.
Assessment
Assessment: Earned Income CreditReview your understanding of the earned income credit.
skill check:
Check your understanding of the earned income credit. Indicate whether each of the statements below is true or false by clicking on the correct answer. To assess your answers, click the Check My Answers button at the bottom of the page.
  1. A tax credit is a dollar-for-dollar reduction of the tax.
  • A.
  • B.
  1. All taxpayers with children can claim the earned income credit.
  • A.
  • B.
  1. For the earned income credit, a child can be claimed as a qualifying child on more than one tax return.
  • A.
  • B.


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