Q. What is the Earned Income Tax Credit?
A. The Earned Income Tax Credit, EITC or EIC, is a benefit for working people with low to moderate income. To qualify,individuals must meet certain requirements and file a tax return, even if they do not owe any tax or are not required to file. EITC reduces the amount of tax owed and may grant a refund.

Additionally, many states have a state version of the EITC to supplement the federal credit. State EITC programs use the same eligibility rules as the federal EITC. Those who qualify for the EITC can also claim Oregon's Earned Income Credit (EIC), which is 8% of the taxpayer's federal credit.

Q. Do I qualify for EITC?
A. To be eligible, taxpayers must have earned income last year and have a valid Social Security number (SSN). Other eligibility requirements for filers include that they cannot use the "married filing separate" filing status, children claimed on the return can't be the qualifying child of another person, and they must be a US citizen or resident alien for the entire year (in most cases).

Earned income and adjusted gross income (AGI) limits vary depending on whether individuals are filing jointly or individually and the number of qualifying children they claim.

Only earned income counts toward the credit. This includes wages, salaries, tips, and other taxable employee pay, and union strike benefits. It also covers net earnings from self-employment and gross income received as an independent contractor. Child support, retirement income, Social Security benefits (SSDI and SSI), unemployment benefits, alimony, and pay received for work while in prison do not count toward the credit.

Q. What Disability Benefits Qualify as Earned Income for EITC?
A. IRS considers disability retirement benefits as earned income until you reach minimum retirement age. Minimum retirement age is the earliest age you could have received a pension or annuity if you did not have the disability. After you reach minimum retirement age, IRS considers the payments your pension and not earned income.

Benefits such as SSDI, SSI, or military disability pensions are not considered earned income and cannot be used to claim EITC. For more information about disability and EITC, see www.irs.gov/Credits-&-Deductions/Individuals/Earned-Income-Tax-Credit/Disability-and-Earned-Income-Tax-Credit.

Q. If individuals received a letter from the IRS about EITC, what should they do?
A. The IRS sends letters for reasons including, but not limited to, the following: to let individuals know that they may qualify for EITC, if they need to verify that you can claim EITC, or if they are proposing changes to your EITC. If you receive a letter or notice, don't ignore it. Follow the directions on the letter. All the information needed is in the letter.

Q. What is the Oregon Kids Credit?
A. A refundable credit for low-income individuals with young dependent children.

Q. How do individuals qualify for the Oregon Kids Credit?
A. Households with a modified adjusted gross income (AGI) who make less than $30,000 per year qualify for the credit. Amounts granted depend on income and household size.

Q. What is the Working Family Household and Dependent Care credit?
A. This is a tax credit that helps low to moderate income families pay for the care of their dependents while they are working, looking for work, or attending school.

Q. What individuals qualify?
A. Individuals who have qualifying household services or dependent care expenses.