Understanding IRS Notice CP09 and the Earned Income Credit

December 02, 2022 by Airam Leon, CTEC
Earned Income Credit

Not all letters from the IRS mean bad news, and the CP09 is one of them. The IRS noticed you did not claim the Earned Income Credit on your Tax Return, and they believe you might qualify for it. Therefore, they are sending the letter so you can double-check and see if you do, in fact, qualify.
 

So, what is the Earned Income Credit?


The Earned Income Credit (EIC) is a tax credit given to qualifying taxpayers who work and have earned income under certain limitations. This is a refundable credit that can help you lower the amount of taxes you owe, and it can even result in a tax refund!

To qualify for the Earned Income Credit, you must meet the following criteria:

 

  1. Adjusted Gross Income Limits. These limits vary depending on your filing status and the number of qualifying children you have.
  2. You must have a Valid Social Security Number.
  3. If Married Filing Separately, you must meet the special rules for separated spouses.
  4. You must be a U.S Citizen or Resident Alien all year.
  5. You cannot file Form 2555 to exclude Foreign Earned Income.
  6. Your investment income must be $10,000 or less.
 

Okay, so that’s a lot of qualifications; how will you know if you qualify?


Within the CP09 notice, the IRS includes an Earned Income Credit Worksheet (Form 15111) on pages 3 through 5 of your notice. This worksheet will guide you through three steps to help determine if you are eligible for the credit. If you qualify for the credit, sign and date Step 4 of the form and mail it to the IRS in the envelope provided, and you can expect a refund check in approximately 6-8 weeks. The amount of the credit is listed on the first page of the notice.

If you do not qualify for the credit, you don’t need to do anything; you can disregard the notice and do not need to inform the IRS.
 

Do I need to have dependents to qualify for the Earned Income Credit?


No. It is important to pay attention to step 3 of Form 15111. This section will go over the four requirements you need to meet if you do not have a qualifying child but might still be eligible for the credits. If you think you may qualify but aren’t sure, it’s worth taking the time to fill out the worksheet and send it to the IRS. If the IRS denies the credit, they will send you a letter explaining why.

On the first page of the notice, the IRS will provide a phone number you can call if you need assistance or have any follow-up questions. This is also the phone number you should call if you qualify for the credit, it has been more than eight weeks since you submitted your Form 15111, and you have not received a refund check.

Getting any unexpected correspondence from the IRS is never pleasant, but it’s important not to disregard it. Taking a little time to read and fill out Form 15111 (CP09) can result in money in your pocket.

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