Quiz: What can the EITC do for you?

By: Dave Roos

Quiz: What can the EITC do for you?
Image: Jeffrey Coolidge/Getty Images

About This Quiz

In 2010, nearly 27 million Americans claimed the Earned Income Tax Credit (EITC) for a total of $59.5 billion. Could you use some of that cash? Then take our quiz to find out if you qualify and how to claim your money.
The EITC is an income tax credit designed to help which of the following segments of American taxpayers?
working Americans with low incomes
The EITC is an anti-poverty measure built into the U.S. tax code to help lift working Americans above the poverty line.
unemployed Americans with no income
wealthy Americans with high tax rates

Advertisement

Which of the following is considered the most successful anti-poverty program enacted by the U.S. federal government?
food stamps (SNAP)
Temporary Assistance for Needy Families (TANF)
Earned Income Tax Credit (EITC)
Even though the EITC is a tax credit, it still fights poverty better than any other social welfare program in America.

Advertisement

How many Americans were kept out of poverty in 2010 by the money they received through the EITC?
127,000 people
1.27 million people
6.6 million people
The Internal Revenue Service (IRS) estimates that 6.6 million people were elevated above the poverty line because of the refunds they received through the EITC.

Advertisement

If you are a single adult, head of household or widow(er) with no children, what is the maximum amount of money you can earn in a year and still qualify for the EITC?
$13,660
The EITC is targeted at working individuals and family with very little earned income, so $13,660 is the maximum you can earn as a childless individual and still receive a tax credit.
$23,660
$33,660

Advertisement

What is the maximum amount of money you can earn as a married couple with three or more children and still qualify to receive the EITC?
$29,078
$49,078
$49,078 is the absolute most you can earn and still receive the EITC, and the amount of your credit will be very low.
$69,078

Advertisement

Which of the following annual income levels results in the largest possible EITC for married couples with one or more children?
$35,000
$24,000
$14,000
If you're married with one or more children, you will receive the largest EITC if your annual income hovers around $14,000. Higher or lower than that, and your EITC amount decreases.

Advertisement

True or False: You don't need to earn any money to qualify for the EITC.
True
False
It's right there in the name. The Earned Income Tax Credit is for people with some earned income, but not enough.

Advertisement

Which of the following is NOT a requirement to qualify for the EITC?
a valid Social Security Number
proof of U.S. citizenship
You don't have to be a U.S. citizen to qualify for the EITC. You can be a legal resident alien as long as you have a Social Security number.
a completed income tax return

Advertisement

Which of the following filing methods is NOT accepted when claiming the EITC?
married filing jointly
married filing separately
If you're married, the IRS says you need to file your income taxes together to qualify for the EITC.
head of household

Advertisement

To claim an EITC with children, your children need to "qualify" under IRS rules. Which of the following children would NOT qualify under those rules?
your 2-year-old grandchild who lives with you
your 16-year-old cousin who lives with you
your 18-year-old biological son who lives with your ex-husband
The three "tests" for qualifying children are age, relationship and residency. In this case, even though your son meets the age and relationship criteria, he doesn't live with you, so your ex-husband is the one who would include him in an EITC claim.

Advertisement

If your child is a full-time student, how old can that kid be and still count as a "qualifying child" for EITC purposes?
younger than 30
younger than 24
Since full-time students often live at home and depend financially on their parents, they are considered qualifying children until the age of 24.
younger than 19

Advertisement

If you're claiming the EITC without any children, can you claim the credit after the age of 65?
Yes
No
The qualifying age range for claiming the EITC as a single person or married couple without qualifying children is 25 to 65 years old. There is no age limit for those claiming the credit with children.

Advertisement

Which of the following does NOT count as earned income under the EITC rules?
tips
Social Security benefits
alimony
Wages, salary, tips and all taxable benefits (including Social Security and unemployment) must be included in your earned income calculations.

Advertisement

True or false: You can still qualify for the EITC even if you have a small amount of foreign earned income.
True
False
If you have foreign earned income that requires you to file IRS form 2555, then you can't receive an EITC.

Advertisement

What is the maximum amount of money you can earn in investment income and still receive an EITC?
$1,150
$3,150
If your investment income exceeds $3,150, then the IRS doesn't think you're in desperate need of an anti-poverty tax credit.
$5,150

Advertisement

In what year was the EITC created?
1935
1975
The EITC emerged from welfare reform efforts in the early 1970s and was included as part of the Tax Reduction Act of 1975.
2005

Advertisement

The EITC is a "refundable" tax credit, meaning it can lower your tax burden below zero, resulting in a refund. Which of the following tax credits are also refundable?
Child Tax Credit
In the majority of cases, the Child Tax Credit is fully refundable.
Saver's Tax Credit
Hybrid Vehicle Credit

Advertisement

How many families that are eligible for the Earned Income Tax Credit fail to claim it each tax year?
50 percent
35 percent
20 percent
One-fifth of qualified families fail to claim the credit, so the Internal Revenue Service and Congress are trying to get the word out about the EITC so that more eligible families can benefit from the credits.

Advertisement

What is the maximum EITC dollar amount that you can possibly receive for tax year 2011?
$10,751
$5,751
This maximum credit of $5,751 is reserved for married couples with three or more children who earn around $14,000 a year.
$2,751

Advertisement

How much money does the IRS wrongfully pay out in EITC claims each year based on incorrect earnings calculations?
$1.3 million
$133 million
$13 billion
Gulp. $13 billion is a lot of zeros for some simple math errors.

Advertisement

You Got:
/20
Jeffrey Coolidge/Getty Images

Featured