Earned Income Tax Credit Eligibility
October 9th, 2008
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Question: Will I be eligible for the Earned Income Credit?
I am probably going to be selling my house this year. This has been my primary residence for the past 2.5 years. It will probably sell for around $20k more than I paid for it. I see that the maximum investment income is around $2,800 or less to still qualify for the EIC. I beleive the sale of my home would be considered capital gains and would be included in investement income.
However I know that there are other tax laws that come into play since I’ve been in my home for 2 of the past 5 years and may not have to pay capital gains on it. Does it make it somehow exempt from being counted as interest income for EIC eligibility?
Please only respond if you really do know what you’re talking about! Thanks in advancd!
My question refers to EIC eligibility for 2007, not 2006. So the sale of my home will be in 07, and I want to know if that will disqualify me from the EIC that would be recieved at the end of 07/begining of 08.
Answer: Since you lived in the home as your primary residence for over two of the last five years, and I assumed owned it that same time, your gain on the house sale won't be taxable, and won't have to be reported on your tax form since the gain will be well under the amount you can exclude. So the sale of your home shouldn't affect your eligibility for EIC.
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You could owe less in taxes and get cash back from the IRS. The Earned Income Tax Credit (EITC) is a federal tax benefit for working people with low or moderate incomes. It can offset some or all of the taxes workers must pay and can help cover any federal income tax workers may still owe at tax time. You may also get cash back through an EITC refund. The EITC can be worth up to $5,567 for ...
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