Generally, the child must be younger than 19 or, if a full-time student, younger than 24. However, if the child is totally and permanently disabled, he or she could qualify as your dependent at any age.
What if the child's parents are divorced?
A child may be claimed by only one parent. If two parents are trying to claim the same child, the IRS will give the credit to the one with whom the child lived the most -- or, if that's the same, the one with the highest income.
How do you claim it?
You must fill out a form EIC and file it with your 1040 or 1040A form. The EIC form, as well as an online calculator, can be found on the IRS Web site at www.irs.gov/eitc.
A 58-page booklet -- Publication 596 -- explains the credit and how to claim it. The publication can also be printed or downloaded from the IRS site. However, as the publication suggests, the credit is complicated and people who claim it are prone to error.
The most common errors include attempting to claim children who don't qualify, failing to include Social Security numbers for yourself or a qualifying dependent, or using the wrong filing status.
Because errors are common, the IRS may ask for additional information when you claim the credit, such as birth certificates and school records for qualifying children. It is not necessary to include these with your tax return, but you should have them available.
Even innocent errors could leave the impression that you're attempting to cheat to receive this break. The IRS says that cheating can affect your ability to claim the credit now and in future years. Use care.
Where can you get help?
If you're uncertain about whether you're filing correctly, seek help.
There is a substantial amount of assistance available, both online and in person. The online tools include a questionnaire that can help you determine whether you qualify and a worksheet that can estimate your credit amount.
In addition, those who earn less than $56,000 -- as anyone who qualifies for the tax credit would -- are qualified to use the IRS free-file system, which provides tax software to prepare and file a simple return.
The link to the free-file system is on the IRS home page at www.irs.gov.
However, for many people, the best help comes from Volunteer Income Tax Assistance Centers, which are set up in schools and community centers nationwide during tax season to help seniors and low-income filers prepare their returns. You can find local tax assistance center sites by calling the IRS tax hotline at (800) 829-1040.