Why Did I Get a CP75 Notice for an Earned Income Credit (EIC) Eligibility Audit?
Typically, when you receive a CP75 notice it means the IRS wants to audit your eligibility for the Earned Income Credit (EIC). The IRS mails a CP75 notice when they need more information to verify a taxpayer’s EIC eligibility.
Discrepancies or inconsistencies involving a filer’s income, filing status, or dependents can trigger an EIC audit.
A CP75 letter will also specify what information or documents you must provide to prove you qualify for the Earned Income Credit.
What are the EIC Eligibility Requirements?
To qualify for the Earned Income Credit, a taxpayer must be eligible to file as single, married filing jointly, head of household, or widow(er) and:
- Have a valid Social Security Number (SSN)
- Be a resident alien or U.S. citizen all year
- Not be claimed as a dependent on another tax return
- Make less than $63,398 (for married filing jointly with 3 or more qualifying children) or less than $17,640 (for married filing jointly and no qualifying children)
- Have investment income less than $11,000
- Not have Foreign Earned Income (Form 2555)
The IRS also has special EIC qualifying rules for military members, clergy, and taxpayers with dependent relatives who are disabled.
More information for who qualifies for EIC based on income, filing status, and dependent children can be found at https://irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc and https://eitc.irs.gov/partner-toolkit/basic-marketing-communication-materials/eitc-fast-facts/eitc-fast-facts.
Can I Claim EIC Without a Qualifying Child or Dependent?
You can claim EIC without a qualifying child, but eligibility criteria differ from those with qualifying children.
Primary eligibility requirements for claiming EIC without a qualifying child include:
- Filing as single or head of household. You cannot file as married filing separately to take the childless EIC.
- You must be older than 25 and younger than 65 at the end of the tax year.
- Single, head of household, and married filing separately taxpayers must have a valid Social Security Number and have lived in the U.S. for more than half of the tax year.
- You cannot be claimed as a qualifying child on another person’s tax return.
The EIC amount for individuals without qualifying children is generally lower than that of individuals with qualifying children.
EIC amounts for 2023 tax returns filed in 2024 range from $600 to over $7,000. This amount depends on your filing status, income, and whether you have qualifying children.
What IRS Forms Do I Need to Submit to Verify I Qualify for EIC If I Received a CP75 Notice?
Common forms and documents requested by the IRS during an EIC audit include:
- W-2 forms, 1099 forms, or other documents showing your earned income amount from employment or self-employment.
- Form 886-H-EIC for proof of child dependents.
- Pay stubs, bank statements, or other income documents.
- Utility bills, rental agreements, or other documents proving your residency status and mailing address.
- Birth certificates, adoption papers, or other documents proving the relationship between the filer and qualifying children designated on the tax return.
The IRS notice CP75 will explain why the audit is being conducted and what specific forms you must submit to verify your eligibility to claim EIC.
Will the IRS Hold My Refund During an EIC Audit If They Sent Me a CP75 Notice?
An EIC audit will likely delay the processing of your tax return. Consequently, the IRS will not issue a refund until the audit is complete.
If the IRS determines that you are eligible for EIC, they will release any refund owed to you. However, if the audit determines that you do not qualify for EIC, you must revise your tax return and resubmit it to the IRS.
What Other Tax Credits Can the IRS Ask to Verify With a CP75 or CP75A Notice?
Tax credits that the IRS may ask to verify with CP75 or CP75A notices include:
Child Tax Credit (CTC)
Available to taxpayers with qualifying children younger than 17.
Additional Child Tax Credit (ACTC)
If the CTC amount exceeds taxes owed to the IRS, taxpayers may be eligible for the Additional Child Tax Credit.
American Opportunity Tax Credit (AOTC)
Assists with qualified education expenses incurred during the first four years of education beyond high school (2 and 4-year colleges, adult schools, occupational centers, etc.).
Premium Tax Credit (PTC)
Helps eligible individuals and families pay for health insurance premiums from the Health Insurance Marketplace.
Child and Dependent Care Credit
Offsets the cost of child or dependent care expenses so eligible individuals can look for work.
Need more help? You can start online by answering 6 simple questions.
6 Simple Questions. Free Evaluation.