Earned Income Tax Credit (EITC)

American taxpayers who earned $59,187 or less in the previous year to take advantage of the Earned Income Tax Credit (EITC).

“This is an extremely important tax credit that helps millions of hard-working people every year,” said IRS Acting Commissioner Doug O’Donnell. “But each year, many people miss out on the credit because they don’t know about it or don’t realize they’re eligible. In particular, people who have experienced a major life change in the past year – in their job, marital status, a new child or other factors – may qualify for the first time. The IRS urges people to carefully to review this important credit; we don’t want people to miss out.”

EITC: A Tax Credit for Low to Moderate Income Workers

The EITC is a tax credit for workers who have low to moderate income. This tax credit helps to offset the burden of Social Security taxes and incentivizes work. The average amount received by eligible workers and families in 2022 was more than $2,000, with 31 million individuals receiving $64 billion in EITC.

The IRS encourages eligible taxpayers to check their eligibility for the EITC and not to miss out on this major tax benefit. The agency also urges non-filers to check if they qualify for EITC and other valuable credits.

Who is at Risk of Overlooking the EITC?

According to the IRS, an estimated 20% of EITC eligible taxpayers do not claim the credit each year. The following groups of workers are at risk of overlooking the EITC:

Those living in non-traditional homes, such as a grandparent raising a grandchild
Workers whose earnings have declined or whose marital or parental status has changed
Individuals without children
Workers with limited English skills
Veterans
Those living in rural areas
Native Americans
Workers with earnings below the filing requirement
Eligibility Requirements for the EITC

To be eligible for the EITC, taxpayers must meet certain requirements and file a tax return, even if they did not earn enough money to be obligated to file a tax return. Workers with qualifying children may be eligible if their adjusted gross income was less than $53,057 in 2022 ($59,187 for married filing jointly). These individuals can receive a maximum of $6,935 in EITC. The maximum EITC for taxpayers with no dependents is $560, available to filers with an AGI below $16,480 in 2022 ($22,610 for married filing jointly), and it can be claimed by eligible workers between the ages of 25 and 64.

EITC is for workers whose income does not exceed the following limits in 2022:

$53,057 ($59,187 married filing jointly) with three or more qualifying children who have valid Social Security numbers (SSNs).
$49,399 ($55,529 married filing jointly) with two qualifying children who have valid SSNs.
$43,492 ($49,622 married filing jointly) with one qualifying child who have valid SSNs.
$16,480 ($22,610 married filing jointly) with no qualifying children who have valid SSNs.

Reference:

https://www.eitc.irs.gov/partner-toolkit/eitc-awareness-day/eitc-awareness-day-2

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc

https://www.irs.gov/credits-deductions-for-individuals

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc