Ask The Money Coach

Would you like to receive a no-strings-attached check for hundreds or even thousands of dollars from the federal government this tax season? If you can answer “Yes” to 10 short questions, you may qualify for a huge financial windfall, compliments of Uncle Sam.

The financial windfall is the Earned Income Tax Credit. The EITC has been touted as one of the best anti-poverty, pro-family tax measures ever created because it targets working individuals and helps them keep more of their hard-earned money. There are many rules governing eligibility for the EITC. But if you can answer “Yes” to each of the following 10 questions, chances are you qualify for the EITC and may have a big check coming your way:

1. Were you a United States citizen or resident alien for all of 2008?

2. Have you lived in the U.S. for more than half a year (i.e. six months and a day)? (Note: living in U.S. territories – such as Puerto Rico, Guam, the U.S. Virgin islands or American Samoa — does not count).

3. Do you (and your spouse, if filing a joint return) have a valid social security number?

4. Did you have earned income from a job last year? (Note: earned income includes wages, salaries, tips, taxable employee pay, non-taxable combat pay, net earnings from self-employment, clergy income, strike benefits, disability benefits, and gross income received as a statutory employee)

5. Based on your family size, was your earned income and adjusted gross income last year less than IRS limits established for the EITC? (Note: for singles, the income limits set by the IRS are capped at $38,646; for married tax filers, the maximum income limit is $41,646. See the table below for more details).

NO CHILDREN 1 CHILD 2 OR MORE CHILDREN

Single Income Cap $12,880 $33,995 $38,646

Married Income Cap $15,880 $36,995 $41,646

Max Credit-Single $438 $2,917 $4,824

Max Credit-Married $438 $2,917 $4,824

6. Is your tax filing status any of the following: single, head of household, qualifying widow(er), or married filing jointly? (Note: married filing separately is the one filing status that disqualifies you for the EITC).

7. Are you at least 25 years old, but under the age 65? (Note: If you are under 25, or are age 65 and older, are you raising a child, grandchild or other descendant that you can claim as a ‘qualifying child?’)

8. Did you earn investment income of $2,950 or less for the most recent tax year? (Note: Investment income includes ordinary dividends, capital gain distributions, taxable interest, and tax-exempt interest).

9. Can you confirm that neither you nor your spouse is the ‘qualifying child’ of another person? (Note: See the IRS definition of a ‘qualifying child’ below).

10. Can you confirm that neither you nor your spouse is filing Form 255, Foreign Earned Income or Form 2555-EZ, Foreign Earned Income Exclusion? (Note: These forms allow you to exclude income earned in a foreign country from your gross income, or to deduct or exclude a foreign housing amount).

If you answered “Yes” to every question above, congratulations! To get the fastest refund, use IRS e-file (http://www.irs.gov/efile) and direct deposit. Filing a Federal return electronically is safe, easy and free, plus you’ll get your refund wired into your checking or savings account in 10 to 14 days.

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 Lynnette Khalfani-Cox, The Money Coach is a personal finance expert, speaker, and author of numerous books on personal finance. She appears frequently as an expert commentator on television, radio and in print.

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