The IRS is making a big push to let taxpayers know about the big changes in the Earned Income Tax Credit. In fact, the IRS just updated its website and sent out a press release alerting the public that it has updated its website’s frequently asked questions with new and updated information.
Here are some key facts:
Many more people can now claim the EITC for the tax year 2021 and many people who did not file a tax return before will have to file a tax return now in 2022 to get this money.
The Earned Income Tax Credit is a tax credit that provides a tax break for low- to moderate-income workers and families. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The Earned Income Tax Credit may also give you a refund.
If you had low or moderate income from self-employment you might also qualify for this benefit.
For 2021, the Earned Income Tax Credit generally is available to the following eligible taxpayers who are at least 19 years old without qualifying children:
Individuals who have earned income of less than $21,430.
Spouses filing a joint return who have earned income of less than $27,380.
For 2021, there are special rules for some taxpayers who were 18 years old. If you were 18 years old in 2021, did not have qualifying children, had earned income, were homeless in 2021, or were formerly in foster care, then you might qualify for the Earned Income Tax Credit when you file your tax return for 2021.
Also, for 2021 only, the Earned Income Tax Credit now has no age limit cap for eligible taxpayers without qualifying children.
Prior to 2021, the Earned Income Tax Credit for those without qualifying children was only available to people ages 25 to 64.
The rules about the EITC are complicated. You really should talk to a tax professional about them. Low and moderate-income individuals and families should contact the various services that offer free taxpayer assistance. These services are set up to handle EITC questions.
Get this money!
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.