The Internal Revenue Service has announced that it is increasing the limit for families to qualify for free income tax preparation and filing in 2010 (Tax Year 2009). Whereas the limit was previously $42,000 in 2009, the limit will increase to $49,000 for a household.

The higher limit reflects an increase in limits for families to qualify for the Earned Income Tax Credit (EITC). While the limits for families with no children, 1 child or 2 children have increased, there is a new development for the upcoming tax season.

The IRS has established a new threshold by which families with 3 children may qualify for the EITC if their incomes are below $48,279 when married filing jointly. Single filers with three children have a limit of $43,279.

These changes open up free income tax preparation to a much larger percentage of working families. They should also provide a needed boost for families that have more than 2 children.

Tax Year 2009 Threshold Amounts:

• $13,440 ($18,440 if married filing jointly) if you do not have a qualifying child
• $35,463 ($40,463 if married filing jointly) if you have 1 qualifying child
• $40,295 ($45,295 married filing jointly) if you have 2 qualfying children
• $43,279 ($48,279 married filing jointly) if you have 3 or more qualifying children

Maximum EITC for Tax Year 2009:

• $5,657 with 3 or more qualifying children
• $5,028 with 2 qualifying children
• $3,043 with 1 qualifying child
• $457 with no qualifying children

These threshold amounts are based on tax year 2009 EITC AGI limits.