Common Errors for the Earned Income Tax Credit (EITC)
You are responsible for what’s on your tax return even when someone else prepares it for you. It is important to understand the common errors you can make when you claim the Earned Income Tax Credit (EITC) on your tax return and what you need to do to avoid them.
If the EITC claim on your tax return has errors, it may result in the following consequences:
- It may take longer for you to get your refund.
- The IRS may audit your EITC claim.
- The IRS may deny all or part of the credit.
To avoid these issues, it is crucial to be aware of the common errors and take the necessary steps to prevent them. The following are the five common errors you need to avoid:
1. Your Child Doesn’t Qualify
Most errors happen because the child you claim doesn’t meet the qualification rules. To qualify for the EITC, the child must meet the following criteria:
- Relationship: Your child must be related to you.
- Residency: Your child must live in the same home as you for more than half the tax year.
- Age: Your child's age and student or disability status will affect if they qualify.
- Joint return: Your child must not file a joint return with another person (for example, their spouse) to claim the EITC.
For more information on qualifying children for the Earned Income Tax Credit (EITC), refer to the related resource.
2. More than One Person Claimed the Child
Make sure that the child you claim lived with you for more than half of the tax year. If multiple people claim the same child, it can lead to errors and potential denial of the EITC claim.
For more information on qualifying children for the Earned Income Tax Credit (EITC), refer to the related resource.
3. Social Security Number or Last Name Don’t Match
Ensure that you write the Social Security number and name exactly as they appear on the Social Security card for everyone you list on your return. Any discrepancies in the information provided can result in errors in your EITC claim.
For more information on qualifying children for the Earned Income Tax Credit (EITC), refer to the related resource.
4. Married and Filed as Single or Head of Household
If you are married, you cannot claim the EITC using the single filing status. Similarly, you cannot claim the EITC using the head of household filing status if you are married and you and your qualifying child lived with your spouse during the last six months of the tax year. It is essential to use the correct filing status to avoid errors in your EITC claim.
For more information on who qualifies for the Earned Income Tax Credit (EITC), refer to the related resource.
5. Over or Underreporting Your Income or Expenses
Ensure that you include all your Forms W-2, W-2G, 1099-MISC, 1099-NEC, and any other records of your income. If the information on your forms does not match IRS records, you may be required to submit additional documentation such as periodic pay statements, check stubs, or a letter from your employer on company letterhead or stationery indicating the dates of employment, gross amount of wages paid, and withholdings deducted.
It is important to report all income you earn from running or owning a business or farm and deduct all allowable expenses.
For more information on what to do if your Earned Income Tax Credit (EITC) claim is denied, refer to the related resource.