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Earned Income Tax CreditsCode: 21b-EIT
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Course description and objectives:
The Earned Income Credit (EIC) is a refundable tax credit that has a significant impact on United States revenue. In fact, EIC claims in any year generally total more than $69 billion.
EIC claims are also increasing in both number and amount1. In the ten year period ending in 2010, the number of EIC claims increased from 19.6 million to 27.4 million, an increase of 39.8%. Not only had the number of claims for EIC increased over the period, the average credit per family also increased by 28.8%, from $1,704 at the beginning of the period to $2,194 in the year the 10-year period ended. The combination of an increased number of EIC claims coupled with an increase in the average credit caused the total amount of EIC claimed to skyrocket by 82.3% over the period from $33.4 billion to $69.7 billion.
In a recent year, 148.7 million individual federal tax returns were filed, and 28.9 million19.4% of individual taxpayersclaimed the Earned Income Credit. Based on that percentage, it would not be unexpected that approximately one taxpayer in every five may claim the EIC
After completing this course, you should be able to:
- Apply the earned income credit rules to determine if a taxpayer is eligible for the tax credit;
- Identify the common errors committed in connection with the earned income credit;
- Describe the consequences of the IRSí disallowance of the earned income credit; and
- Recognize the tax return preparerís EIC due diligence requirements.
Presentation Method: QAS Self-Study
CPE credit: 4 Hours
Program Level: Update
Advance Preparation: None
Exam expiration date: Participants must submit exams for grading within one year from the date of purchase