Mar 22 2020

#1040 #tax #table #2020-1040 tax table 2020

1040 tax table 2020

See The Earned Income Credit & EIC Table

Table of Contents

What is the Earned Income Credit (EIC)?

In an effort to help individuals with low to moderate-income and to reduce poverty, the United States provides a program called the “Earned Income Credit” (EIC). This program is designed to aid individuals who work for a living but earn a low income. A qualifying individual can claim a credit from their tax return, which can offset tax liability and result in a refund. This credit has helped families for years.

The Earned Income Credit was passed in 1975 in an effort to reduce poverty and assist those who work to provide for their families but earn lower income levels. It’s often criticized because the credit discourages individuals from earning higher incomes since the credit phases-out as you make more.

The earned income tax credit is available to claim for the 2019, 2020 tax season. The IRS estimates that about 15% of eligible individuals do not claim this tax credit.

How Does the Earned Income Credit Work?

The EIC provides support for low and moderate-income working parents (with qualifying children) in the form of tax credits. The tax credit is not as beneficial for individuals without children, but not having children does not disqualify you from the credit. Individuals receive a tax credit that can be claimed on Form 1040, which is a percentage of the individual’s earnings up to a specific maximum limit.

What is the Maximum Earned Income Credit Amount?

The IRS has set these maximum table limits you can get for tax year 2019:

  • $6,431 with three or more qualifying children
  • $5,716 with two qualifying children
  • $3,461 with one qualifying child
  • $519 with no qualifying children

How to Calculate Your Credit Amount

The Dependents Tax Credit Calculator will give you an accurate view of how much you could be entitled to. Just answer some simple questions regarding your income and your living circumstances, and you’ll get a readout on how much you may be eligible for.

Who Qualifies for the Earned Income Credit?

Although the Earned Income Credit is available for all working individuals, it greatly benefits those with children. To qualify an individual must:

  • Have a valid social security number. All members of the family must have a social security number to qualify.
  • File under the following filing status:
  • Single
  • Married filing jointly
  • Qualifying wife or widower
  • Head of household
  • Have less than $3,400 of investment income for the tax year.
  • Not file a Foreign Earned Income Form 2555 or Foreign Earned Income Exclusion
  • Have earned income and adjusted gross income within the IRS limits. See the Earned Income Tax Credit table below to see if you qualify for the income phase-out limits.

Earned Income Tax Table

The IRS provides an EIC table/chart which can be used to determine how much credit you can claim on your tax return. This earned income tax credit table can be found below:

To calculate the amount of earned income credit you can claim, simply find the row that matches that amount of earned income in the first two columns of the table to your filing status and the number of qualifying children you claim on your tax return.

The credit is based on a percentage of your earned income but also starts to phase-out as you increase your income. The credit also increases as the number of children claimed on your tax return increases.

1040 tax table 2020

1040 tax table 2020

1040 tax table 2020

The earned income tax credit is available to claim for the 2019, 2020 tax season. See the EIC table amounts and how you can claim this refundable tax credit.
SOURCE: 1040 tax table 2020

Written by admin

%d bloggers like this: