Accounting Services Milwaukee | Earned Income tax Credit

The Earned Income Tax Credit (EIC) is a special tax benefit for people who earn low or moderate incomes. It lowers their taxes, supplements their wages, and makes work more attractive and affordable. Qualifying persons who file federal tax returns get back some or all of the federal income tax withheld from their pay during the year. Even workers whose earnings were too small to have taxes withheld can get the EIC. Families with children who claim the federal EIC are automatically eligible for the Wisconsin Earned Income Credit.

Who can get the EIC?

The EIC is available to workers with low to moderate incomes. The income limit depends on the number of ‘qualifying children’ and on whether the tax filer is married or unmarried.

  • The limit for families with no children is $13,660 ($18,740 if married);
  • the limit for families with one child is $36,052 ($41,132 if married);
  • the limit for families with two children is $40,964 ($46,044 if married);
  • and the limit for families with three or more children is $43,998 ($49,078 if married)*.

*This category was first added in 2009.

More detail on eligibility rules, including information about qualifying children

How much can individuals and families get back from the EIC?

The amount of the credit depends on earnings and on adjusted gross income. As income increases, the value of the credit increases, until the maximum credit is reached. As income increases further, the value of the credit gradually decreases.

  • Workers without children can get up to $464; the maximum credit is for workers earning approximately $6,000 – $7,500.
  • Working families with one child can get up to $3,094; the maximum credit is for families earning approximately $9,000 – $16,500.
  • Working families with two children can get up to $5,112; the maximum credit is for families earning approximately $12,500 – $16,500.
  • Working families with three or more children can get up to $5,751; the maximum credit is for families earning between $12,500 – $16,500.

More detail on benefit amounts

 

 

Will getting the EIC affect eligibility for welfare benefits?

The EIC — and other tax credits — do not count as income in determining eligibility for benefits such as W-2, Medicaid, Food Stamps, SSI, or public or subsidized housing.

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