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 $9,770. You may also be able to take this credit if a child lived with you and you
earned less than $25,760 (with one qualifying child). Other rules apply. For details,
refer to Tax Topic 601, Earned Income Credit (EIC), or Publication 596, Earned Income Credit.
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.
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.
What are advance earned income credit payments?
If you expect to qualify for the earned income credit in 1998, you may be able to start
getting part of the credit with your pay now, instead of waiting until you file your 1998
tax return in 1999. 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 have a qualifying
child, even if you will be eligible to claim the earned income credit on your 1998 return.
To see if you qualify, refer to 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 604.
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 new 1997 tax law extended the credit for an additional nine months and added one
additional targeted group. 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, 1998. The
credit can be claimed by filing Form 5884, Work Opportunity
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
- 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, Work Opportunity Credit Pre-Screening Notice and
Certification Request, 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 for other
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