Protect Your EITC Claim From an Audit!
The Earned Income Tax Credit (EITC) is a tax credit for low-to-moderate-income workers and their families. If you have earned income from a W-2, a 1099, or self-employment and qualify for the EITC, it can lower the tax you owe or even increase your refund. If you follow tax news, you may have heard about the EITC being discussed recently. Although the credit has been available for years, the government is now considering implementing eligibility pre-screening before taxpayers can claim the credit.
While it does not look like these pre-screening measures are going to be put in place (at least for the Tax Year 2025 filing season), the IRS will likely audit taxpayers who claim the EITC at higher rates in future years, especially if you’re claiming dependents. If you are claiming the EITC and are concerned about the possibility of an audit or future pre-screening, there are steps you can take to prepare. Audits of an EITC claim often ask you to prove that you are related to your dependents and that they lived with you for more than half of the year. Here are some ways to ensure you can prove this to the IRS.
Don’t have your kids’ birth certificates? Visit the Vital Records office and obtain a copy, or order one online here.
Do you have a lease? Ensure that your children’s names are included on the lease and that you retain a receipt for your rent payment.
Do you take your kids to the doctor’s office? When you take your kids to their last doctor’s appointment for the calendar year (before the next tax filing season opens), have their doctor write a letter saying that you are your kids’ guardian and that you all live at the same address. The letter should be on the official letterhead of the doctor’s office. In fact, the IRS has created a template of this letter here, so you can just bring this to your doctor and ask them to re-create the letter and fill in the blank sections.
If the IRS audits your taxes for your EITC claim or another reason, please give us a call to see if we can assist you. You can call our intake at 215-981-3800 between 9:30am and 12pm Monday through Thursday or apply online here.
