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1 1 (October 28, 2008)

handle is hein.crs/crsaiaf0001 and id is 1 raw text is: Order Code RS21352 Updated October 28, 2008 The Earned Income Tax Credit (EITC): Changes for 2008 and 2009 Christine Scott Specialist in Social Policy Domestic Social Policy Division Summary The earned income tax credit (EITC), established in the tax code in 1975, provides cash assistance to lower income working parents and individuals through the tax system. The EITC for some earned income credit recipients will be higher in 2009 than it was in 2008. An increase in the size of the EITC will occur because the maximum amount of earned income used to calculate the credit and the phase-out income level are indexed for inflation. For tax year 2008, the maximum EITC for tax filers without children is $438, and it will increase to $457 for 2009. For families with one child, the maximum credit is $2,917 in tax year 2008, and it will increase to $3,043 in 2009. For families with two or more children, in tax year 2008 the maximum is $4,824, and it will increase to $5,028 in 2009. Beginning in tax year 2008, the phase-out level for married couples filing a joint tax return is $3,000 higher than the level for other filers. Beginning in tax year 2009, this provision ($3,000) is adjusted for inflation. This report will be updated when new information becomes available. Calculation of the EITC Qualifications for, and the amount of, the EITC depend on the amount of earned income, adjusted gross income (AGI), and whether the tax filer has a qualified child. For the EITC, a qualified child is determined by the definition of a qualified child for the personal exemption. In general, for the personal exemption for a dependent, an individual is either a qualifying relative or a qualifying child. A qualified child for the EITC must meet the following three criteria for the personal exemption:

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