The American Recovery and Reinvestment Act of 2009 created a new category of families with three or more children and increased the maximum benefit of Earned Income Tax Credit for tax years 2009 and 2010.
The Tax Relief and Job Creation Act of 2010 extended these changes through 2012.
The maximum credit for 2010 tax returns is $5,666 for workers with three or more qualifying children. However, workers without qualifying children may also be eligible for a smaller credit amount.
To qualify for EIC, filers must first meet certain requirements then the categories are split; those who have a qualifying child and those who do not. Visit www.irs.gov for more information on which families qualify.
The most important rule for military personnel and civilians are that one must have lived in the United States for more than half of the year. For military personnel, this rule is met because U.S. military personnel stationed outside the U.S. on extended active duty are considered to have lived in the U.S. during that duty period for EIC purposes. This rule does not include retiree, civilians or U.S. contractors.
Also, if a spouse is a nonresident alien for any part of the year EIC cannot be claimed unless the status is married filing jointly. However, if this is choice selected, the spouse will be taxed on the filer’s worldwide income.
For more assistance regarding tax issues, visit the Wiesbaden Tax Assistance Center at its new location in the Tony Bass Fitness Center, Wiesbaden Army Airfield Building 1043, Room 207 or call mil 337-4755 or civ (0611) 705-4755.