Question

Which of the following requirements to claim earned income tax credit is true?

o The credit can be claimed under any filing status, minus certain exceptions
o The taxpayer must have a valid ssn for employment in the U.S.,
o Issued before the due date of the return, including extensions.
o It is only available to taxpayers who are u.s. citizens.
o Investment income cannot be more than $4,000.

Answer 1

The accurate requirement to claim the Earned Income Tax Credit (EITC) is that the taxpayer must have a valid SSN issued before the due date of the return, including extensions. Investment income limits for EITC eligibility in the tax year 2021 are $3,650, not $4,000.

Step-by-step explanation:

The correct requirement to claim the Earned Income Tax Credit (EITC) among the options provided is that the taxpayer must have a valid SSN for employment in the U.S., issued before the due date of the return, including extensions. This means that the credit cannot be claimed with an ITIN (Individual Taxpayer Identification Number). Additionally, the EITC is not only available to U.S. citizens; resident aliens can also qualify if they meet all other requirements. Importantly, for the tax year 2021, investment income cannot be more than $3,650, not $4,000, to be eligible for the EITC. It's also worth noting that the credit can be claimed under various filing statuses, with exceptions such as 'married filing separately'.