IRS forms to receive up to $7,000 Earned Income Tax Credit (EITC)
When filing a 2022 tax return, Americans would be well advised to examine the Earned Income Tax Credit which can provide a major boost to one’s tax refund.
The Earned Income Tax Credit is a refundable credit, meaning that once taxes owed are accounted for the remainder gets added onto a tax refund. The credit could be worth up to almost $7,000, but the amount varies depending on earnings and the size of the taxpayer’s family.
Last year, the Internal Revenue Services reports that “as of December 2022, 31 million workers and families received about $64 billion in EITC. The average amount of EITC received nationwide was about $2,043.”
According to the IRS, in addition to submitting Form 1040: US Individual Income Tax Return (or Form 1040 SR, U.S. Tax Return for Seniors), a taxpayer with a “qualifying child [...] must also file the Schedule EIC (Form 1040 or 1040-SR), Earned Income Credit.”
You might be interested in: Can you claim both EITC and Child Tax Credit?
Who is eligible for the EITC?
According to the IRS eligibility depends on a few factors:
- Employment and Income: Those eligible are required to have worked during in 2022 and must have an annual income under $59,187;
- Investments: Must have an investment income under $10,300 in tax year 2022;
- You must have had a valid Social Security number when you submit your 2022 return;
- You must have been a US citizen or resident alien; and
- You cannot file Form 2555 which is submitted by those who have Foreign Earned Income to report.
The IRS also developed an eligibility tool for taxpayers to easily find out if they are able to claim the EITC.
Do you need to claim a dependent to receive the EITC?
No. So long as you meet the “basic qualifying rules” and “have your main home in the United States for more than half the tax year,” you do not need to claim a dependent to be eligible. However, a qualifying taxpayer cannot have been claimed on another person’s tax return and must be between the ages of twenty-five and sixty-five.
For taxpayers in the care of children, the value of the EITC is greater: $600 for those with “no qualifying children,” versus $3,995 (1 child), $6,604 (2 children), $7,430 (3 children).