Does anybody out there know if this is true,
2007-10-11 07:10:45 · 6 answers · asked by emigirl6363 2 in Business & Finance ➔ Taxes ➔ United States
It is not automatic that you will get a $5,000 credit if you make under $36,000.
A taxpayer with two dependent children who makes between approximately 11K and 16K will get a refundable credit of $4,536 (the Earned Income Credit).
The EIC decreases to zero by the time the taxpayers income reaches $38,000. This may be the source of the rumor you heard.
2007-10-11 07:18:09 · answer #1 · answered by ninasgramma 7 · 2⤊ 0⤋
Not exactly.
Certain low earners can collect the Earned Income Credit. There is a small credit (under $420) for single taxpayers with very low income and no dependent children.
If you have 1 or more children you may qualify for quite a bit more. The credit rises with your income up to a point and then drops as your income continues to rise. At $36,000 it would be nearly wiped out. The maximum credit is $4,536 (for 2006) and is payable to a married couple with 2 or more dependent children if their income is between $11,300 and $16,900.
The EIC is refundable so you can collect it even if your tax liability is $0.
There are also two credits that almost anyone with children can receive. The Child Credit and the Additional Child Credit. The Child Credit is not refundable and the Additional Child Credit is. There are income limits for the Additional Child Credit as well.
In theory at least it may be possible to get $5,000 in credits but few taxpayers will qualify for that much.
2007-10-11 07:47:23 · answer #2 · answered by Bostonian In MO 7 · 3⤊ 0⤋
Not true. If you're talking about the earned income credit, with income of $36,000 if you have dependent children you'd get something, but far less than $5000. Depending on the number of children, you might also get something for Child Tax Credit or Additional Child Tax Credit.
The total would not likely be as much as $5K though.
2007-10-11 07:16:14 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
I have not heard this. A credit means credit towards tax you would owe, a deduction would be that amount deducted from your gross earnings. Hummmm For most families they would not even owe $5,000 in taxes after even the standard deduction. So doesn't sound right. Check the IRS web site or call them
2007-10-11 07:16:45 · answer #4 · answered by L S 2 · 0⤊ 1⤋
your first $8300 or so is not taxed due to your personal exemption (about 3300 - increases every year) and your standard deduction (about 5000) - you subtract these off your w-2 income to come up with taxable income - other adjustments may exist or if you itemize deductions, the standard deduction can increase
2007-10-11 08:03:41 · answer #5 · answered by Anonymous · 0⤊ 1⤋
well, i make under that and i have never gotten a credit like that. but it will also depend on what you have as witholding, i mean if you have more taken out every paycheck then you'll get more back at the end.
2007-10-11 07:14:01 · answer #6 · answered by mickey g 6 · 0⤊ 1⤋