11-1. Can I get the earned income credit?
You may be able to take this credit if a child didn't live with you and you
earned less than $10,200. You may also be able to take this credit if a child
lived with you and you earned less than $26,928 (with one child), or less than
$30,580 (more than one child). Other rules apply. For details, see
Tax Topic 601, Earned Income Credit (EIC),
or Publication 596,
Earned Income Credit.
11-2. Can I claim the child and dependent care credit?
If you paid someone to care for your dependent under age 13 or your disabled dependent
or spouse so that you could work or look for work, you may be able claim the credit
for child and dependent care expenses. For specific information on how to qualify
for this credit refer to Tax Topic 602,
Child and Dependent Care Credit, or
Publication 503,
Child and Dependent Care Expenses.
11-3. Can I get the credit for the elderly or the disabled?
Generally, if you were age 65 or older or disabled and your income and nontaxable
social security or other nontaxable pension are below specified amounts, you may
be able to take this credit. For more details, refer to
Tax Topic 603, Credit for the Elderly or the Disabled, or
Publication 524,
Credit for the Elderly or the Disabled.
11-4. What are advance earned income credit payments?
If you expect to qualify for the earned income credit in 2000, you may be
able to start getting part of the credit with your pay in 2000, instead of
waiting until you file your 2000 tax return in 2001. This is called the
advance earned income credit or AEIC.
To get part of the credit with your pay, you must have at least one qualifying child,
and meet certain other conditions. You cannot get the AEIC if you do not
expect to have a qualifying child, even if you will be eligible to claim the
earned income credit on your 2000 return. To see if you qualify, see
Form W-5,
Earned Income Credit Advance Payment Certificate, or
Publication 596,
Earned Income Credit. Additional information on the advance earned income
credit is also available in Tax Topic 754.
11-5. I heard there is a credit for hiring certain groups of workers,
such as veterans or ex-felons. Is that the same thing as the Work Opportunity Tax Credit?
The work opportunity credit provides an incentive to hire individuals from targeted
groups that have a particularly high unemployment rate or other special employment needs.
The credit can be as much as 40% of the qualified wages you pay to individuals
who begin work for you between October 1, 1996, and June 30, 1999. The credit
can be claimed by filing Form 5884,
Work Opportunity Credit.
An individual is a member of a targeted group if he or she is a:
- Qualified recipient of Aid to Families with
- Dependent Children (AFDC) or successor program.
- Qualified veteran.
- Qualified ex-felon.
- High-risk youth.
- Vocational rehabilitation referral.
- Qualified summer youth employee.
- Qualified food stamp recipient.
- Qualified SSI recipient.
An individual is not considered a member of a targeted group unless
your state employment security agency certifies him or her as a member.
This certification requirement can be satisfied in either of two ways:
- On or before the day on which the individual begins work for you, you have received a certification from your state employment security agency that the individual is a member of a targeted group, or
- On or before the day you offer employment to an individual, you complete Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity and Welfare-to-Work Credits and send it to your state employment security agency no later than the 21st day after the individual begins work.
You must receive the certification before claiming the credit.
See Tax Topic 750,
Employer Tax Information, and Tax Info for Business, on this site for
other employer information.
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