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previous page Previous Page: Publication 17 - Your Federal Income Tax - Examples
next page Next Page: Publication 17 - Your Federal Income Tax - Other Credits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication
taxmap/pub17/p17-192.htm#en_us_publink100035198

Advance Earned Income Credit(p247)


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previous topic occurrence Advance Earned Income Credit (EIC) Payment next topic occurrence

Do you expect to be eligible for the EIC this year (2009) and to have a qualifying child? If so, you can choose to get payments of the EIC in your paycheck now instead of waiting to get your EIC all at once in 2010 when you file your tax return for the year 2009. These payments are called advance EIC payments. This part of the chapter explains how you may be able to get them this year and how to report them on your tax return.
taxmap/pub17/p17-192.htm#en_us_publink100035199

Who can get the advance payment of the earned income credit?(p247)


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To get part of the earned income credit paid to you throughout the year in your paycheck, you must meet all the following rules.
  1. You must expect that your earned income and AGI will each be less than $35,463 ($38,583 if you expect to file married filing jointly).
  2. You must expect to have a qualifying child.
  3. You must expect to meet all the rules in Parts A, B, and D of this chapter or in the instructions for Form W-5.
EIC
The rules in Parts A, B, and D are expected to be basically the same for 2009, except that you will be allowed to have more earned income, more adjusted gross income, and up to $3,100 of investment income. Also, there will be changes to the definition of a qualifying child. For details, see Publication 553, Highlights of 2008 Tax Changes.
taxmap/pub17/p17-192.htm#en_us_publink100035200

Persons who are not entitled to receive advance payments.(p247)


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Persons who are not entitled to receive advance payments.

Under certain circumstances, even if you meet these rules, you may not be entitled to get advance EIC. If your wages are not subject to federal income tax, social security tax, or Medicare tax withholding, you cannot get the advance payment of the earned income credit. If you are a farm worker paid on a daily basis, your employer is not required to pay you the advance amount of the credit.
taxmap/pub17/p17-192.htm#en_us_publink100035201

How To Get Advance  
Payments for 2009(p247)


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How To Get Advance Payments for 2009

If you meet the rules stated above under Who can get the advance payment of the earned income credit, give your employer a Form W-5, Earned Income Credit Advance Payment Certificate, for 2009.
After you have read the instructions and completed Form W-5, give the lower part of the form to your employer. Keep the top part for your records.
taxmap/pub17/p17-192.htm#en_us_publink100035202

More than one employer.(p247)


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More than one employer.

If you have more than one employer, give a certificate to only one of them. If you are married and both you and your spouse are employed and expect to qualify for the credit, you may give a Form W-5 to your employer and your spouse may give one to his or her employer.
If you receive advance payments of EIC in 2009, you must file a 2009 tax return (even if you would not otherwise have to file) to report the payments and claim any additional EIC. Box 9 of your Form W-2 will show the amount you received. See the instructions for Form 1040 or Form 1040A for the line number on which you report advance payments of EIC.
taxmap/pub17/p17-192.htm#en_us_publink100035203

Receipt of advance payments you do not qualify for.(p247)


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Receipt of advance payments you do not qualify for.

If you receive advance payments of EIC in 2009, and later find out that you are not eligible for some or all of them, you still must report them on your tax return.
EIC
You cannot use Form 1040EZ to report your advance payments. You must file Form 1040 or Form 1040A.
taxmap/pub17/p17-192.htm#en_us_publink100035205

When to give your employer a new Form W-5.(p247)


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When to give your employer a new Form W-5.

The 2009 Form W-5 you give to your employer is valid until December 31, 2009. If you expect to be eligible for EIC in 2010 and you want to receive advance payments, you must give your employer a new Form W-5 in 2010. Do this each year you expect to be eligible for the EIC.
If you no longer want to get advance payments or if your situation changes and you no longer qualify for the earned income credit, you must give your employer a new Form W-5. Check the "No" box on line 1 of the new form.
If your spouse files a Form W-5 with his or her employer, you must file a new Form W-5 with your employer. Check the "Yes" box on line 3.
taxmap/pub17/p17-192.htm#en_us_publink100035206

Advance Payments  
Received in 2008(p247)


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Advance Payments Received in 2008

If you received advance payments of EIC in 2008, you must file Form 1040 or Form 1040A to report the payments. Your Form W-2, box 9, will show the amount you received. Report the amount on line 60 (Form 1040) or line 36 (Form 1040A).
EIC
You cannot use Form 1040EZ to report your advance payments.
taxmap/pub17/p17-192.htm#en_us_publink100035208
taxmap/pub17/p17-192.htm#TXMP2baabb32
Smith's Schedule EIC Text DescriptionSmith's Schedule EIC  
taxmap/pub17/p17-192.htm#en_us_publink100035209
taxmap/pub17/p17-192.htm#TXMP2a68d105
Smith's EIC Worksheet Text DescriptionSmith's EIC Worksheet  
taxmap/pub17/p17-192.htm#en_us_publink1000117993
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Earned Income Credit (EIC) Worksheet—Lines 8a and 8b

 
1.Enter your earned income from Step 2 on page 131.6,240  
2.Look up the amount on line 1 above in the EIC Table on page 16 to find the credit. Be sure you use the correct column for your filing status (Single or Married filing jointly).   
 Enter the credit here2.438
 If line 2 is zero, stop You cannot take the credit. Enter "No" in the space to the left of line 8a.   
3.Enter the amount from Form 1040EZ, line 43.6,260  
4.Are the amounts on lines 3 and 1 the same?    
  square Yes. Skip line 5; enter the amount from line 2 on line 6.    
 No.Go to line 5.    
5.Is the amount on line 3 less than $7,200 ($10,200 if married filing jointly)?   
 Yes. Leave line 5 blank; enter the amount from line 2 on line 6.   
  square No.Look up the amount on line 3 in the EIC Table on page 16 to find the credit. Be sure you use the correct column for your filing status (Single or Married filing jointly).   
   Enter the credit here5.            
   Look at the amounts on lines 5 and 2. Then, enter the smaller amount on line 6.   
        
6.Earned income credit. Enter this amount on Form 1040EZ, line 8a6.438
caution If your EIC for a year after 1996 was reduced or disallowed, see above to find out if you must file Form 8862 to take the credit for 2008.   
taxmap/pub17/p17-192.htm#w10311gc3802
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EIC Eligibility Checklist

You may claim the EIC if you answer "Yes" to all the following questions.*
   YesNo
1.Is your AGI less than:
  • $12,880 ($15,880 if married filing jointly) if you do not have a qualifying child,
  • $33,995 ($36,995 if married filing jointly) if you have one qualifying child, or
  • $38,646 ($41,646 if married filing jointly) if you have more than one qualifying child?
    (See Rule 1.)

2.Do you, your spouse, and your qualifying child each have a valid SSN? (See Rule 2.)

3.Is your filing status married filing jointly, head of household, qualifying widow(er), or single?
(See Rule 3.)
Caution: If you or your spouse is a nonresident alien, answer "Yes" only if your filing status is married filing jointly.
(See Rule 4.)

4.Answer "Yes" if you are not filing Form 2555 or Form 2555-EZ. Otherwise, answer "No."
(See Rule 5.)

5.Is your investment income $2,950 or less? (See Rule 6.)

6.Is your total earned income at least $1 but less than:
  • $12,880 ($15,880 if married filing jointly) if you do not have a qualifying child,
  • $33,995 ($36,995 if married filing jointly) if you have one qualifying child, or
  • $38,646 ($41,646 if married filing jointly) if you have more than one qualifying child?
    (See Rules 7 and 15.)

7.Answer "Yes" if you (and your spouse if filing a joint return) are not a qualifying child of another person. Otherwise, answer "No." (See Rules 10 and 13.)

 STOP:If you have a qualifying child, answer questions 8 and 9 and skip 10 – 12. If you do not have a qualifying child, skip questions 8 and 9 and answer 10 – 12.*

  
8.Does your child meet the age, residency, and relationship tests for a qualifying child?
(See Rule 8.)

9.Is your child a qualifying child only for you? Answer "Yes" if your qualifying child also meets the tests to be a qualifying child of another person, but the other person is not claiming any child-related tax benefits using that child. Answer "No" if you do not know whether the other person is claiming any child-related tax benefits using that child.

10.Were you (or your spouse if filing a joint return) at least age 25 but under 65 at the end of 2008?
(See Rule 11.)

11.Answer "Yes" if you (and your spouse if filing a joint return) cannot be claimed as a dependent on anyone else's return. Answer "No" if you (or your spouse if filing a joint return) can be claimed as a dependent on someone else's return. (See Rule 12.)

12.Was your main home (and your spouse's if filing a joint return) in the United States for more than half the year? (See Rule 14.)
*PERSONS WITH A QUALIFYING CHILD: If you answered "Yes" to questions 1 through 9, you can claim the EIC. Remember to fill out Schedule EIC and attach it to your Form 1040 or Form 1040A. You cannot use Form 1040EZ. If you answered "Yes" to questions 1 through 8 and "No" to question 9, see Rule 9 to help you determine whether you can claim the EIC. If you answered "Yes" to questions 1 through 7 and "No" to question 8, answer questions 10 through 12 to see if you can claim the EIC without a qualifying child.
 PERSONS WITHOUT A QUALIFYING CHILD: If you answered "Yes" to questions 1 through 7, and 10 through 12, you can claim the EIC.
 If you answered "No" to any question that applies to you: You cannot claim the EIC.
previous pagePrevious Page: Publication 17 - Your Federal Income Tax - Examples
next pageNext Page: Publication 17 - Your Federal Income Tax - Other Credits
 Use previous pagenext page to find additional occurrences of topic items.Index for this Publication