Tax Refund: If I claim all my exemptions, and qualify for EIC and Child Credit, can I still get a refund?

Question

Money is tight, so I want to claim all my exemptions so the taxes aren't taken off my check. My wife and I qualify for Earned Income credit and the Child Tax credit with our two kids. If I do this will I still get a refund, or will I have to pay?

Answer 1

How old are your two kids? The Child Tax credit stops the year that they hit the age of 17. If they are under that age for right now, what you want to look at is to see if your Earned Income credit and the Child Tax credit add up to more than what your tax liability is. If they do than you will won't owe anything with having no taxes taken off your check (You still will have to have social security and medicare taxes taken out no matter what.). You should also look at your state tax return (if you live in a state that has a state income tax) to see if your state credits are more than your state tax liability.

Answer 2

If your tax liability for the year is zero, you could claim enough on your W-4 to not have federal income tax withheld. But be careful - if you expect to have any tax liability, don't set your W-4 to not have anything withheld or you could owe when you file, and possibly have to pay a penalty.

The child tax credit only reduces taxes, so if yours is already zero, you would not be eligible for it. But there's something called the additional child tax credit, which can give you some of that money even if you don't owe any taxes - be sure to check if you're eligible for that.

If you are eligible for EIC, you'd still get that as a refund.

Answer 3

Whether you get a refund or owe, even if you qualify for EIC and CTC, depends on your income. Do a mock tax return and see what your tax liability or refund is. Then go to your payroll department and re-do your W-4.

If in fact you owe zero tax and are getting a refundable credit back because of the EIC, you can get an advance EIC in your paycheck. Your payroll department can set that up for you.

Answer 4

Depending on your total income and credits, the EIC may actually reduce your tax BELOW zero. If this is the case, don't wait until tax time for a 'refund'. Ask you employer for form W-5. Earned Income Credit Advance Payment Certificate. It allows you to have the 'refund from the EIC paid to you as part of your regular paycheck.

Answer 5

I have helped some people with children do their taxes. They didn't pay tax because they were self employed. They still received a tax refund because of the EIC. The amount depends on how much money you made and how many children you have.