What is the earned income tax credit (EITC)?
The earned income tax credit or EITC or EIC, is a refundable tax credit for low- and moderate-income workers.
For 2021 tax year, the EIC ranges from $1,502 to $6,728 depending on tax-filing status, income and number of children. In 2022, the range is $560 to $6,935. People without kids can qualify.
If you fall within the guidelines for the credit, you may claim it on your tax return. If you didn’t claim the earned income credit when you filed your taxes in the last three years but you think you qualified for it, IRS allows you to amend prior tax returns so you can get that money back.
How does the earned income tax credit work?
⦁ For the 2021 tax year, the EIC ranges from $1,502 to $6,728 depending on your filing status and how many children you have.
⦁ You can use your 2019 earned income instead of your 2021 earned income to calculate your EITC, but only if your 2019 income is higher than your 2021 income.
⦁ You don’t have to have a child in order to claim the earned income credit.
⦁ The earned income tax credit doesn’t just cut the amount of tax you owe the EITC could also score you a refund, and in some cases, a refund that’s more than what you actually paid in taxes.
⦁ If you claim the EITC, the IRS cannot issue your refund until mid-February by law.
Income limit for the earned income credit (EIC)
Below are the maximum earned income tax credit amounts, plus the max you can earn before losing the benefit altogether.
2021 Earned Income Tax Credit-