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EARNED INCOME CREDIT (EIC)
Income Eligibility and credit amounts for tax year 2008
There are two major changes for TY 2008:
- For the federal EIC, the higher income limit differential for married workers jumps to $3,000.
- For the Maryland EIC, the maximum amount for the refundable EIC goes from 20% to 25% of the Federal EIC AND the Maryland refundable is now available to households without a "qualifying child."
Families with 1 child:
Income Cut off = $33,995 (or $36,995 for married workers)
Maximum Federal credit: $2,917
Maximum Maryland refundable credit: $729
TOTAL REFUNDABLE CREDIT (combining state & federal): $3,646
(Maximum Maryland non-refundable credit: $1459)
Families with 2 or more children:
Income Cut off = $38,646 (or $41,646 for married workers)
Maximum Federal credit: $4,824
Maximum Maryland refundable credit: $1,206
TOTAL REFUNDABLE CREDIT (combining state & federal): $6,030
(Maximum Maryland non-refundable credit: $2412)
Workers between the ages of 25 and 64 with no children:
Income Cut off = $12,880 (or $15,880 for married workers)
Maximum Federal credit: $438
Maximum Maryland refundable credit: $110
TOTAL REFUNDABLE CREDIT (combining state & federal): $548
(Maximum Maryland non-refundable credit: $219)
The numbers above indicate eligibility cut-offs, by family size, and maximum credit amounts. Please use caution in using these numbers with the public. When people hear the income cut-off and the maximum credit amount in the same sentence, they often infer that the credit amount rises as income rises, up to the cut-off. This is not true. The distribution of credit is more like a bell curve. The maximum credit amounts go to families, with more than one child, in the income range of $12,060 to $15,740 and tapers off as income falls or rises from that mid-range. For families with only one child, the maximum credit goes to families with income between $8,580 and $15,740.
In 2009, Advance EIC payments will be available to any worker with at least one qualifying child who expects 2009 income of less than about $35,000 (or $38,000 for married workers).
Child Tax Credit continues to be $1,000 per qualifying child. The Additional Child Tax Earnings Threshold is $8,500 in 2008.
Updated: 11/26/08
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