Earned Income Credit (EIC)

Time Requirement: 1 hour

Purpose

Review the Earned Income Credit (EIC), which is based on the taxpayer's filing status, number of qualifying children, earned income, and adjusted gross income.

By using the intake and interview sheet, the EIC charts in the Volunteer Resource Guide, and correctly filling out the EIC worksheets, most of the errors that result from incorrectly computing the EIC can be avoided.

Objectives

• Determine if a taxpayer is eligible for the EIC.
• Calculate the EIC.

Teaching the Lesson

Refer to the Lesson Plan for helpful instructor notes, visual aids, TaxSlayer® demos, and Internet links. Prompt students to share what they know about EIC.

• Explain the meaning of "refundable credit"
• List the types of income that may qualify for the EIC
• Summarize the rules that everyone must meet to be eligible for the EIC
• Explain the rules for a taxpayer with a qualifying child
• Explain the rules for a taxpayer without a qualifying child
• What resources are available to help determine if a taxpayer qualifies for the EIC

Refer students who may want to work independently to Publication 4491, Earned Income Credit (EIC).

Key References

This lesson refers to the following publications and forms:

• Form 13614-C
• Publication 4012, Tab I, Earned Income Credit, Tab D, Income, and Tab C, Dependents
• Publication 17, Chapter 36, EIC
• Form 1040 Instructions

All references to materials can be found by clicking the Job Aids and Media buttons. There are also links to helpful tools that can be found on the irs.gov public portal. For this lesson, students can link to the following sites for additional help:

• Tax Trails - Earned Income Tax Credit (EITC) - Use the EITC Assistant to Find Out if You Should Claim it
• FAQs - Earned Income Tax Credit
• FAQs - Qualifying Child Rules
• Tax Topics - Earned Income Credit
• EITC Home Page
• EITC Income Limits, Maximum Credit Amounts and Tax Law Updates
• EITC Central

TaxSlayer® Demos and Tutorials

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking the link for TaxSlayer IRS training.

Publication 4012, Tab I, Earned Income Credit , includes examples of how to enter EIC in TaxSlayer.