The Earned Income Tax Credit (EITC) is a credit that aims to benefit taxpayers with low and moderate incomes. Eligible taxpayers may file for the EITC whether or not they have children.
Many people miss this significant tax break because they assume they don’t qualify or misunderstand the eligibility criteria. Find out whether you are eligible for the EITC and what you can do if you didn’t claim an earned income credit on your previous return.
Who Is Eligible for the Earned Income Tax Credit (EITC)?
You may be able to claim EITC in 2023 if you:
- Have been a U.S. citizen/resident alien throughout 2022
- Had worked and earned income up to $59,187 in 2022
- Generated investment income (if any) under $10,300 in 2022
- Hold a valid Social Security number by the time your 2022 return is due
- Don’t file Foreign Earned Income (Form 2555)
- Are between 25 and 65 by the end of the tax year if you have no qualifying children
On top of these basic requirements, the IRS has additional filing rules for military and clergy members, disabled taxpayers and their families, and people who are married but filing separate returns. If you aren’t sure whether you qualify for an Earned Income Tax Credit, you can use the IRS EITC assistant or consult a competent tax professional.
How Much Is the EITC Worth, and When Will You Get Your Refund?
The EITC for 2022 ranges between $560 and $6,935 for eligible taxpayers. The number of children in your family and your filing status will determine the amount you may receive. Generally, the less you earn and the more children you have, the higher your EITC may be.
For the tax year 2023 (to report on your 2024 tax return), the credit is projected to grow and will range between $600 and $7,430.
If you qualify for the EITC, you will probably see your refund in your bank account or on an eligible debit card mailed from the IRS, provided there are no additional issues and you elected to receive your return by direct deposit. You can view your refund status through the IRS website or app.
The EITC and Children
Qualifying children can make your potential EITC amount much larger and make it possible to claim an EITC with a higher AGI (adjusted gross income).
Keep in mind that you may claim not only biological or adopted children on your tax return but also foster children, stepchildren, and even family members like younger siblings, nephews, and nieces, provided they live with you and qualify as your dependents.
The age cap for qualifying children is 19 by the end of the year or 24 for full-time students. Children with permanent disabilities qualify for an EITC with no age limit.
What Happens if You Mistakenly Didn’t Claim EITC on Your Previous Tax Return?
What if you were unaware you may qualify for EITC and didn’t claim this credit on former tax returns? You may submit an amended return for up to three years back and claim your Earned Income Credit retroactively. Doing so may generate a significant refund or cut your tax debt by thousands of dollars if you owe back taxes.
Stay on Top of Your Taxes With Levy & Associates
Keeping up with complicated and often-changing IRS requirements is a challenge for many American taxpayers. We at Levy & Associates provide the full scope of tax services, from helping you understand how the Earned Income Tax Credit works to resolving audits, liens, penalties, and more. Our team includes seasoned tax attorneys, CPAs, and former IRS officers.
Call 800-TAX-LEVY or contact us online to learn more about our tax services.