Richard G. Lugar, United States Senator for Indiana
Home > Earned Income Tax Credit Information

Senator Lugar encourages Hoosiers to claim Earned Income Tax Credit

If you earned less than $40,000 in 2007, you may qualify for the Earned Income Tax Credit.

Nationally, the IRS estimates that 20 to 25 percent of eligible Americans do not claim the EITC.

In addition, taxpayers who qualify can retroactively claim three years of the EITC if eligible in the previous years. This is money that hard working people have earned and when claimed, can be saved or put back into the economy.

According to the IRS, more than 441,000 Hoosiers claimed the federal EITC in 2006 for refunds totaling $831 million.

Enacted by Congress in 1975, the EITC is a refundable tax credit available to families with a working member where the family income falls below a certain level. The EITC was designed to decrease the tax burden and supplement wages, as well as provide incentive to work. When the EITC exceeds the amount of taxes owed, it results in a tax credit for those taxpayers who qualify and claim the credit.

To qualify for the EITC, taxpayers must file a tax return, even if they are not required to file a tax return based on income, and meet ONE of the following income qualifications for 2007:

You may qualify for the EITC if you have: Earned income
less than:

Claim an EITC up to:

1 qualifying child (filing single)
1 qualifying child (married, filing jointly)
$33,241
$35,241
$2,853
2 or more qualifying children (filing single)
2 or more qualifying children (married, filing jointly)
$37,783
$39,783
$4,716
No qualifying children (filing single)
No qualifying children (married, filing jointly)
$12,590
$14,590
$428
For the EITC, a qualifying child is:
  • under the age of 19 at the end of 2007,
  • under the age of 24 and a full-time student, or
  • any age if permanently and totally disabled at any time during the year.

    • In addition to meeting one of the income qualifications, taxpayers must meet ALL of the following requirements:

    • Must file a tax return;
    • Must have earned income;
    • Must be between 25 and 65 years of age, or have a qualifying child;
    • Cannot be claimed as a dependent by anyone else;
    • Must have a valid Social Security number;
    • Must be a U.S. citizen or a legal permanent resident;
    • Must have lived in the U.S. for at least six months;
    • Cannot file as married filing separately;
    • Cannot file Form 2555 or Form 2555-EZ;
    • Investment income not exceeding $2,900.

    For assistance in determining eligibility, taxpayers may use the EITC Assistant, a new web-based tool, available through the IRS. By providing basic information, this program will assist taxpayers with filing status; determining eligibility and estimating the amount of credit you may receive.